Multi-sided Platforms Research Articles

Unpacking innovation in digital multi-sided platform startups: making sense of path creation in generating two distinct types of innovation

Purpose This study aims to investigate the role of effectual logic as the basis of entrepreneurial action in path creation for influencing the performance of open innovation outcomes within the context of digital multi-sided platform (MSP) startups. Design/methodology/approach We utilize the PLS-SEM method with a sample of 70 Indonesian digital MSP startups that have implemented open innovation practices. Findings The empirical findings indicate a path creation between effectual logic and the open innovation process, particularly through the integration of absorptive capacity and crowds or communities management practices. Absorptive capacity development fosters incremental innovation, whereas crowds or communities management practices lead to radical innovation. Originality/value The research findings suggest that, despite limited resources and experience, young entrepreneurs can successfully implement an open innovation strategy for their digital MSP platforms by utilizing effectual logic principles, which capitalize on the external resources provided by digital platform ecosystem members.

Data Driven Dominance in Digital Markets: Assessing Indonesian Competition Law in the Digital Age

Digital markets and multi-sided platforms are created by the internet, that are characterized by the use of big data as new market power. Big data enabled dominant and digital-based key players such as Instagram and Facebook/Meta to record and forecast their users’ personal data and spending capacity to increase their economies of scale by tailoring updates to the users’ demand. Therefore, big data becomes an essential market share, and its scarcity determines newer entrants’ ability to enter the market and the existing incumbents’ ability to survive by grappling with fast-paced digital changes. This legal morphology benefits data-driven undertakings to elevate their position in the market and achieve enough independence to influence market behavior. On the other hand, multi-sided platforms refer to where a single undertaking sells different products to different types of consumers on different sides of the platforms that affect each other’s demand due to the cross-group network effect. Undertakings often sell zero-price products to one side while imposing the monetary burden and gaining revenue from the other. This situation triggered legal challenges to the calculation of market share necessary to determine a dominant position that is essentially mathematical based. Furthermore, big data and multi-sided platforms stimulate the rise of novel abusive practices in the digital market. This paper will analyze the Indonesian 1999 competition law’s flexibility to deal with these changes by comparing the existing framework on consumer data protection, big data, and multi-sided platforms management to the European Union competition law.

Effectuation in digital multi-sided platform startups: An entrepreneurial journey through open innovation process

A paradox arises in platform-based open innovation, wherein digital Multi-Sided Platform (MSP) firms with little initial co-creation ability can successfully adopt an open innovation strategy that typically requires a high level of co-creation capacity. This study aims to fill this gap by theoretically exploring the connection between effectuation, which involves entrepreneurial action based on a given set of means and the selection of possible effects, and the open innovation process with co-creation capacity. The objective is to contribute to the significant growth of digital MSP startups. This study investigates the process of open innovation based on platforms in the context of resource constraints, limited knowledge, and uncertainty. The outcomes of a quantitative study including 70 digital MSP startups indicate that the most efficient route for these businesses to achieve Innovation Performance is by first developing Effectuation, followed by Integrative Capabilities and Co-Creation Capacity, and last, Innovation Performance. However, in this shortest path, the involvement of Crowds or Communities Management Practices plays a role in partially moderating the relationship between Effectuation and Integrative Capabilities. Platform-based innovation serves as the point of integration between effectuation theory in entrepreneurship research and open innovation strategy in strategic management research. The bridge connecting these two fields has significant implications for research on platform-based innovation in the field of strategic entrepreneurship.

Design principles for a blockchain-based multi-sided platform for the sustainable trade of water: An affordance approach

Water scarcity has become a critical challenge affecting the well-being of many communities worldwide and has been incorporated as one of the focal points within the Sustainable Development Goals (SDG 6). Digital technologies, such as blockchain technology, have shown promising potential to help tackle this issue through smart distribution of water abundancies to water-scarce regions. This research employs affordance theory and affordance-based design (ABD) to investigate the design of blockchain or distributed ledger technology (DLT) to tackle challenges related to water scarcity. Using design science research (DSR), this paper proposes design principles (DP) for a blockchain-based multi-sided platform (MSP) for the smart distribution and trade of water. To obtain our principles, we collaborated with a company employing a blockchain-based MSP for water trade. We identified the different elements of the DPs, including affordances and material properties, and matched these principles with meta-requirements obtained from the literature. This research aims to contribute to the scholarly debate by generating prescriptive knowledge in the form of DPs and providing tangible contributions that shed light on the optimal design of similar blockchain applications. These applications are envisioned to ensure their efficacy in addressing the pressing challenges of water scarcity and equitable water access, thereby fostering a sustainable and resilient future for everyone.

Non-profit and hybrid organizations as multi-sided platforms: insights from the analysis of sustainability models

PurposeThis study investigates the sustainability models of non-profit and hybrid organizations, which aim to balance economic, social and environmental objectives. The research introduces the Sustainability Model Canvas to analyze these organizations and identify common patterns, unique characteristics and managerial insights to balance the triple bottom line.Design/methodology/approachThe research utilizes the Sustainability Model Canvas to examine the sustainability models of 200 non-profit and hybrid organizations. Data were collected from secondary sources, including articles, reports and websites. The analysis was conducted using the activity system theoretical framework, which helped to identify design elements and themes within the business models of the studied organizations.FindingsThe study reveals four primary sustainability model patterns: donated income, earned income, public income and auto-generated income. An additional mixed approach pattern is identified, combining elements from the four primary patterns. The research highlights the parallels between these sustainability models and multi-sided platform business models, offering managerial suggestions for leveraging these patterns to achieve sustainability.Research limitations/implicationsThe study is based on secondary data, which may limit the depth of insights compared to primary data collection. At the same time, the chance to consider hybrid organization through multi-sided platform lenses provides relevant contributions to both the literature streams.Practical implicationsThe identified sustainability model patterns and managerial suggestions can serve as blueprints for non-profit and hybrid organizations aiming to design or innovate their sustainability models. The Sustainability Model Canvas offers a practical tool for organizations to visualize and balance their triple bottom line objectives.Social implicationsThe research underscores the importance of integrating social and environmental considerations into business models, promoting a holistic approach to sustainability that can lead to broader social and environmental benefits.Originality/valueThis research contributes to the business model literature by extending the focus beyond traditional profit-oriented organizations to include non-profit and hybrid organizations. The introduction of the Sustainability Model Canvas provides a new tool for designing and analyzing sustainability-oriented business models. The study also suggests considering sustainability models as multi-sided platforms, offering new insights for both academic and practical applications.

Balancing Variety and Quality: Examining the Impact of Benefit‐Linked Cross‐Subsidization on Multisided Platforms

AbstractMultisided platforms face a fundamental trade‐off: should they ease entry for a larger number of providers of complementary products or services (complementors) to join the platform and benefit from cross‐side network externalities, or should they limit entry to maintain complementors’ incentives to provide high‐quality offerings? We contend that a specific cross‐subsidizing pricing strategy – where the amount of subsidy to complementors is explicitly linked to the overall revenue they generate on the other side of the platform – may mitigate this trade‐off. Using data from the airport industry, we demonstrate that following a reduction of airlines’ entry barriers, airports that subsidize airlines, based on the aforementioned scheme, can boost their financial performance and maintain traffic composition in favour of legacy airlines, which bring passengers who spend more in airport shops. Our findings shed light on how cross‐subsidization may balance the variety and quality of complementors and their offerings on multisided platforms.

Business models of multisided platforms for in-destination tours and activities: a morphological analysis approach

ABSTRACT In-destination tours and activities multisided platforms (T&A MSP) are growing ventures at the forefront of digitalizing tour and activity sector. While these platforms are transforming this sector, understanding of their business models and how they create, deliver and capture value is limited. To address this gap, we developed a morphological matrix to facilitate alternative business model exploration and discovery. Derived from three iterations, this matrix visually represents and describes the characteristics of T&A MSP business models. Utilizing this tool, T&A MSP can evaluate and make transformative adjustments to their business models, thereby enhancing performance, adapting to evolving tourists’ preferences and generating greater value.

Centralization Decisions in Multisided Platform Portfolios

Centralization Decisions in Multisided Platform Portfolios

Evolution of the Merger Guidelines: Is This Fox Too Clever by Half?

The 2023 Merger Guidelines make some notable improvements over the 2010 Horizontal Merger Guidelines. They give greater emphasis to the idea that predicting the competitive effects of a proposed merger is inherently difficult and that to block a merger the government need only show a risk that the merger may substantially lessen competition – not that it will do so. They also give greater emphasis to dynamic competition and innovation – especially with regard to acquisitions of potential entrants – and they add useful material on multi-sided platforms. However, the treatment of market definition in the 2023 Merger Guidelines may weaken horizontal merger enforcement by demoting the role of the “hypothetical monopolist test,” which is used to define markets for the purpose of measuring market shares, and by removing extensive material from prior guidelines that explained why market shares measured in narrower markets tend to be more informative than market shares measured in broader markets. The 2023 Merger Guidelines lower the market concentration thresholds that trigger a presumption by the antitrust enforcement agencies that a merger may substantially lessen competition, but the enforcement data suggest that change will have little effect in practice. The 2023 Merger Guidelines also may lead to less effective deterrence of harmful mergers because they are not well targeted at the mergers that are most likely to substantially lessen competition. One cannot prioritize everything.

Value perceptions of first-party content on multi-sided platforms: Findings from the Amazon Marketplace

Value perceptions of first-party content on multi-sided platforms: Findings from the Amazon Marketplace

The e-commerce platform conundrum: How manufacturers' leanings affect their internationalization

Internationalization is seen as a commercial opportunity and, in some circumstances, necessary for many firms' resilience in today's volatile and unpredictable global marketplace. Most exporting organizations must cope with various emergent e-commerce digital platforms, given the rising importance of digital and technological transformation of modern international trade and its related strategic challenges. The spread of third-party multi-sided platforms (TPMPs) and established actors such as Amazon, eBay, and Alibaba, has led research to overlook evaluations involving other types of multi-sided e-commerce platforms, such as content management systems (CMSs). Nevertheless, these other platforms are evolving by leaps and bounds and changing the rules of the game for e-commerce website development. This study draws on the transaction cost economics perspective and theory of boundary choices to shed light on the differences in manufacturing firms' internationalization performances from the reliance among CMSs and TPMPs. The study retrieves data from a survey of 263 manufacturing firms' managers and executives relying on structured equation modeling. The findings outline that adopting CMSs partially mediates the relationship between e-commerce strategic commitment and internationalization performances. In contrast, TPMPs negatively moderate the relationship between e-commerce commitment and CMS and between e-commerce commitment and internationalization despite directly partially enhancing internationalization performances. Finally, the study reveals an inverted U-shaped relationship between e-commerce commitment and TPMP reliance.

Evaluating The Use Of Multi-Sided Platforms On The Brand Performance Of Malaysian SME Food Outlets

The Malaysian food industry has been increasingly using the services of multi-sided platforms (MSPs) to offer online food delivery services, especially in urban cities such as Kuala Lumpur and Penang. Various global research has also found consistent indications that this trend will continue to grow over the next few years. This service involves the active collaboration between MSPs such as GrabFood and Foodpanda, delivery riders, end consumers, and food outlets. While there are many studies that evaluate the MSP business model and consumer behavior in this industry, there are limited studies that focus on the perspective of the food outlets. This study will address this research gap while focusing specifically on Malaysian SME food outlets to see if using MSPs to offer online food delivery services can improve their brand performance, both in terms of financial performance and brand equity. In addition, the study evaluates the effect that a food outlet’s intellectual capital has on the decision to use MSPs. The study also includes perceived environmental turbulence as a moderating variable on the relationship between MSPs and brand performance. The result of the study shows the impact of different intellectual capital assets on business model innovation activity. It also shows that there is no significant moderating impact of environmental turbulence on this industry even though there is evident turbulence. Lastly, the results show that using MSPs does improve the brand performance of Malaysian SME food outlets.

How does the prior experience of complementary entrepreneurs affect the perception of multisided platform affordance? Evidences from China

ABSTRACT Evidences from cognitive science and neuroscience suggest that affordance needs to be understood by combining epistemology. However, existing studies have not agreed on whether prior experience affects the perception of affordance, and the specific path remains a black box. Using samples from China, this paper investigates the influence mechanism of complementary entrepreneurs’ prior experience on the perception of multisided platform affordance. The results indicate that the prior experience promotes the perception of multisided platform affordance, and entrepreneurial alertness plays a partial mediating role. Platform leadership and role conflict negatively moderate the relationship between entrepreneurial alertness and multisided platform affordance.

Leading the transition to multi-sided platforms (MSPs) in a B2B context – The case of a recycling SME

Digital multi-sided platforms (MSP) are emerging as powerful forces to disrupt existing industry value chains in B2B. SMEs can play a crucial role in the emergence of digital platform ecosystems. Although much research has been carried out on the design and governance of digital platforms, research mainly focused on greenfield approaches in B2C and neglected the process of transformation of an established company in B2B to a MSP. Recognizing this unique opportunity for SMEs, we addressed this research gap by examining the journey of a B2B-SME to a MSP, capturing and presenting the dynamics of barriers, actions, and outcomes as generative mechanisms. Applying Moore's (1993) ecosystem lifecycle model, we developed a process model guiding SMEs to MSPs and discussed four propositions representing key activities supporting the transformation, reorganization, and emergence of the ecosystem. The results provide empirical evidence for the research on platform ecosystem emergence in B2B value chain networks. Hereby, we contribute to the call for further understanding of how B2B MSPs foster the redesign of value chains and B2B relationships between supply chain actors to enable the implementation of more sustainable business practices.

Appraising the Transformation and Future of Digital Multisided Platforms–A Bibliometric Analysis and Systematic Literature Review

Appraising the Transformation and Future of Digital Multisided Platforms–A Bibliometric Analysis and Systematic Literature Review

Coopetition through Multisided Platforms Business Model: A Case Study of FEBRAFAR Value Cycle

Coopetition through Multisided Platforms Business Model: A Case Study of FEBRAFAR Value Cycle

What Drives Emerging Products Adoption Intention? Comparing Strategic Entrepreneurship Outcome of Leading Digital Multi-Sided Platform Startups

What Drives Emerging Products Adoption Intention? Comparing Strategic Entrepreneurship Outcome of Leading Digital Multi-Sided Platform Startups

Enhancing resilience in digital multi-sided platform start-ups: An exploration of entrepreneurial logic and open innovation strategies

Enhancing resilience in digital multi-sided platform start-ups: An exploration of entrepreneurial logic and open innovation strategies

Investigating Governance Mechanism of Multi-sided Platforms in a Down Trodden Economy: A Case Study Analysis

Investigating Governance Mechanism of Multi-sided Platforms in a Down Trodden Economy: A Case Study Analysis

Gig to the left, algorithms to the right: A case study of the dark sides in the gig economy

In the current wave of digital technology that continues to innovate platform business models, an increasing number of gig economy platforms are deploying algorithms to optimize and reshape legacy transaction processes and create new value for multi-stakeholders. Nevertheless, algorithmic management also leads to many unforeseen dark sides for multiple participants in the practice, compromising their rights and interests (e.g., price discrimination, labor process control, and privacy concerns). Accordingly, this study aims to examine the negative implications of the introduction of digital technology in platform innovation within gig economy platforms, specifically focusing on the dark sides of algorithmic management, from a multi-sided platform perspective. Through a series of interviews with multi-stakeholders of Meituan Takeaway, the largest food-delivery platform in China, and secondary data analysis based on rooting theory, we develop a theoretical framework to deepen the understanding of the dark sides of algorithmic management and provide valuable insights for platforms seeking to optimize their operations management.