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Ch10(E), Chapter 10 - Coggle Diagram
Ch10(E)
Chapter 10
Platform business transforms market
Strong economic scale
Explosive network effects
compressed the whole middle layer of retail
Market structure overturn
grow the pie or create an alternative pie
Turn business inside out
Pursue best opportunities
All partners sharing the value they jointly create
Complexity of business competition
three levels
Platform v.s Partner
to appropriate innovation
goods v.s goods
Amazon as a platform
Partner v.s Partner
two unrelated platform partners
Platform v.s platform
Ecosystem outstrip product/service
competitive strategies under platform business
control the value created by platform
promote more interactions between customers & suppliers
users engage in multiple platforms can weaken network effects:green_cross:
avoid multihoming
when users engage multiple similar platforms...
Multihoming
methods
platform envelopment
limiting platform access
Platforms seek exclusive access to essential assets
1 more item...
provide a similar
feature directly or to offer it indirectly via an ecosystem partner
create numerous user base & powerful network effects
try to consistently create the greatest value for users
:red_cross:Not all values
you should control
:check:Only
key values
Leave other businesses to partners
in the ecosystem( low-value/small-scale ) :silhouettes:
Competition & Cooperation
cooperate
compete
when？
Partner weaken the platform’s own competitive position
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Create new value
eg. IG provides photo sharing services and increases the diversity of FB functions.
Leverage social sharing and network effects to build their own platform
1 more item...
benefit
fostering innovation +
:star:
Avoid the risk of business failure
The key factors in mataining a sustained advantage
Supply economics of scale
Ex: railroads, oil, auto manufacture, and so on
The market power is driven by its massive fixed costs of production
The greater the supply economies of scale, the greater the tendency toward market concentration
Network effect
Positive network effect
: values and profits increase as more users join the ecosystem
High multihoming and switching costs
Push a market toward higher concentration, dominated by fewer, larger companies.
Users’ taste for niche specialization
Apple's specialization was popular among those who admired its design system, especially graphic artists and musicians.
Traditional competition(Divide 🍰)
Porter 5️⃣ Forces
Encourage value chain participants to compete,
reducing d/s bargaining power.
Build entry barriers.
Lonely 🏰
:red_cross:Not feasible,
Focus on
individual
relationships
> interactive environment
.
Avoid competition, maintain an advantage
Hypercompetition supported by modern technology (expanding /finding alternative 🍰).
Almost no entry barriers.
Competition is everlasting, advantages are fleeting.
Flexibility equals a key competitive advantage.
Co-opetiton