Abstract
The platform business model is widely used because it is capable of various open innovation deliverables. However, it has a high probability of failure, caused by a variety of value streams that follow the two-sided market theory (each side has a distinct group of users). Therefore, extensive research on value streams and the attributes of platform business is essential to reduce platform business failure and ensure sustainable growth. By analyzing 21 case studies and conducting 30 in-depth interviews, this study proposes three types of Internet platform business strategies which can serve as a frame of reference to examine the impact of different value streams and open innovation on platform businesses. This study highlights a typology that sheds light on the heterogeneous meaning that corporates associated with creating new platform businesses adhere to and seeks to improve understanding of fundamental differences in platform business creation processes.
Highlights
In modern business, companies are confronted with environmental changes while attempting to sustain their business [1] in terms of market structures, competitive advantages, public policies, and technological foresight [2,3]
This study aims to examine the typology of platform business that depends on value streams, and it formulates the central research question: “how are the value streams diversified by the platform business model?” and three sub-questions: (1) how are the value streams different in each type of the platform business model? (2) How are the value creation and value co-creation different in each type of the platform business model? and (3) How are the direct and indirect network effects different in each type of the platform business model?
Platform providers have focused on interconnecting organizational processes as a competitive strategy by making various third parties participate in two-sided markets
Summary
Companies are confronted with environmental changes while attempting to sustain their business [1] in terms of market structures, competitive advantages, public policies, and technological foresight [2,3]. Platform business, explained originally by the theory of two-sided markets [4,5,6], has currently taken center stage as the newest value stream that aims to help firms overcome these changes and grow sustainably. This is because it is capable of a variety of open innovation deliverables, which ensure a corporate’s sustainable growth. This study develops a conceptual framework that integrates the most relevant features of value streams in the platform business. It analyzes the different types of platform business models with an accurate understanding of complicated value chains and streams and provides information vital for platform providers seeking to understand the characteristics of platform service—from their own perspective and that of other participants
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