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CDPSG2[PR] Ch4 – Disruption & Ch10 – Strategy, G2 member,…
CDPS
G2
[PR] Ch4 – Disruption & Ch10 – Strategy
How Platforms Conquer and
Transform Traditional Industries
Business structural impacts
Re-intermediation
Reduce or Redefine Intermediation
Market aggregation
Assemble supply and demand parties
Creating new efficiencies
Serve and provides information
Delinking assets from value
Separation of ownership and use
Ex. MRI Machine
Use together
Increase in usage
Create maximum benefit
The incumbents: Feedback
Platform business
Change traditional and existing business
Existing company platform
increase revenue and reduce marketing costs
Nike
Vertical integration
Buying upstream suppliers or downstream distributors
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Horizontal integration
Expand by widening the pipeline
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change
digital technology
traditional
original stock markets
taxi
Traditional media companies
mail order shopping
open-air marketplace
modern
Uber
Software is eating the world
Internet transformed the world of business
efficient pipelines ate inefficient pipelines
online systems for distributing goods and services
low marginal costs of distribution
Amazon
distribution channel
creation infrastructure
coordination mechanism
Leveraging network effects
trust
quality
reliability
CHAPTER 10: STRATEGY
How Platforms Change Competition
Types of competitors | Nature of the competitive battles
are being transformed**
How Platforms Compete (1)
How Platforms Compete (5)
Platform Envelopment
Definition
While adjacent platforms appears and offers it indirectly via an ecosystem partner!
How Platforms Compete (6)
Enhanced Platform Design
traditional business
higher quaiity products & services
Nowadays
trying to improve the quality of services, facilitate interactions
How Platforms Compete (4)
Redefining Mergers and Acquisitions
Preventing Multihoming by limiting platform access
Multihoming - users engage in similar types of interactions on more than one platform (Adobe Flash Player)
Limiting Multihoming
Adobe designed Flash developer tools - Apple iOS to Google Android and web pages
Apple prevent Adobe for using Multihoming so make "in-app purchases" - licensing rules & tech
How Platforms Compete (2)
Fostering Innovation, Capturing Its Value
Alibaba owns search on its platform, Facebook owns search on its platform, Microsoft owns Word, PowerPoint, Excel on its platform
How Platforms Compete (3)
Leveraging the value of Data
Monster.Inc - first mover advantage
two-sided market (employers & employees)
targeted only active job seekers
LinkedIn - targeted only social networks of professionals, not active job seekers
Data is more crucial role in competition
new competitive threats from
unexpected/counterintuitive rivals
(a rapid emergence, development)
Battles between traditional businesses and platform businesses
Battles among platform businesses
Collaboration and co-creation vs. competition
outside values vs. inside values
opportunity vs. ownership
interaction vs. separation
inimitable resource vs. ability to access to the networks
STRATEGY IN THE TWENTIETH CENTURY:
A CAPSULE HISTORY
Porter's
five forces model of competition
the threat of new entrants to the market
Traditional Strategies
erect barriers to new entrants
promote competition among suppliers
keeping buyers relatively small, disunited, and powerless.
Specific segment markets
Differentiate products
Control resources, a
Avoid price wars
Defend its profit margins
Products Innovation
avoiding ruinous competition for itself
encouraging it for everyone else
Mergers or Acquisitions (M&A)
horizontal integration
controls most or all of a specific product
or service marketplace
vertical integration
controls an entire value chain from materials to marketing
the threat of substitute products or services
the bargaining power of customers
the bargaining power of suppliers
the intensity of competitive rivalry
Birger Wernerfelt's
Resource-based View
Effective barriers are
indispensable and inimitable resources
De Beers (Global diamond marketing system)
Richard D’Aveni | Rita Gunther McGrath
the role new technologies in
the age of hypercompetition
shorter and shorter cycle times
of products or services
Internet redraw industrial
and geographic boundaries
Competition is perpetual motion
(Flexibility is more important than
ownership of infrastructure)
Denning
"to create a customer"
relationships between companies and customers are lasting source of value
Three-dimensional chess:
the new complexities of competition
platform against platform
Strategic advantage is based on
power of entire ecosystems (not only products)
platform against partner
incorporates partners
into platform business's operating system
partner against partner
two unrelated platform partners compete for the same positions in the platform ecosystem
G2 member
IBS3 邵渝恬 Katharine
IBS1 Loy
IBS3 陳偉良 Wee Liang
SoM1 黃文勝 Victor
Reconfiguring value creation
new sources of supply.
Wikipedia
volunteers to capture and organize the world’s knowledge
minimize the barriers
Twitter
Youtube
Advertising
Youtuber
Summary
Winner-take-all-markets
network effects
multihoming & switching costs
supply economies of scale
lack of niche specilalization
Platform competition - 3D chess
platform against partner
partner against partner
platform against platform
Platform B
with most attractive offering
Monster
Book a flight
Facebook
rather than buying Zynga, keeping a partnership with Zynga
Zynga
Farmville & Mafia Wars - biggest hits in 2011
LinkedIn
Platform A
developing a feature that competes with B
Airbnb
facilitation and matching
Craigslist
listings of rooms and apartments for short-term rent
More Numerous initial user base and more powerful network effects!! (It's Triumphant)
Example
Airbnb easier to use and maintain "erstwhile category leader"
Vs