Digital Platforms Flashcards
What are the three types of platforms?
- Product platform
- innovation platform
- transaction platform
What is a product platform?
A set of common components, modules or architectures that can be used to create a family of related products, deducting cost and complexity of creating new products
What are the characteristics of product platforms?
Modularity: product platforms are composed of modular components that can be combined in different ways to create new products
Flexibility: product platforms can be used to create a wide range of products, from low end to high end itch varying features or configurations
Standardisations: often involves standardising certain components or interfaces to ensure compatibility or interchangeability
What are the benefits of product platforms?
Reduces development time and cost
Increased product variety
Improved quality and standardisation
What are the challenges of product platforms?
- product is not a platform, can’t be monetised easily
- platform design is risky, one mistake can compromise a whole family of products
Give one example of a product platform
Sony Walkman, huge success
Launched more than 250 models
2 year life cycle, 1.5 for competitors
What is an innovation platform?
Products, services and techniques that act as a foundation on which external innovations (complémentons) can develop their complementary product, service , tech and order them to users e.g., game consoles PC IBM Intel
What are the characteristics of innovation platforms?
Enables innovation by simplifying the future development process ( similar to product platform)
Innovation platforms can be sold unlike product platforms
What is a transaction platform?
A business model of two or multiple actors that interact through a technology that profits from indirect network externalities.
Connects someone looking for something to someone offering, facilitating the economic transaction
Free for buyer but the merchant pays a small percentage of the transaction
2 characteristics of transactional platforms
- 2 types of actors, demand and selling side
- Platform has no value by itself, value is determined by number of actors
Explain direct and indirect network effects of transactional platforms
Direct (same side ) increase number of customers or users drives increase value for same type of customers, zoom, Skype etc
Indirect (cross side). Increase in number and quality of customers on one side drives increasing value for customers on the other side e.g., PayPal, visa , Amazon
