This book introduces platform firms as unique business models. Leveraging on the early literature on network economics and strategy frameworks, this book explores how platform business firms evolve in the modern business world. Taking a strategic perspective, this book engages the reader with core concepts, case studies, and frameworks for analyzing platform business firms. This book differentiates platform business firms from traditional pipeline firms; explores engagement with different actors, value creation, and operations of platforms; elucidates resources and capabilities of platform firms that provide them sustained competitive advantage; analyzes performance levers in operating platform business models, including complementarities with other business models; and discusses the sustainability of platform business models, in the face of regulatory and societal challenges, among others.

The book is designed as a primer for entrepreneurs setting up and operating platform business firms, senior managers in large corporations repurposing their resources to initiate network dynamics in their businesses, early career managers, and professionals engaging with myriad platform firms for their professional and personal needs. This book intends to provide a decision-maker with a portfolio of decisions to make to create, operate, sustain, and generate value out of a platform business firm. It is also useful for policy professionals to appreciate the economics and policy implications of regulating and governing platforms in a post-digital world.

R Srinivasan is Professor of Strategy at the Indian Institute of Management Bangalore. He teaches courses on strategy and platform business models for MBA students at IIMB and the Friedrich Alexander University of Erlangen-Nuremberg, Germany. He has written a lot of cases and articles on platform businesses in India and Germany. He also engages with a variety of startups and businesses that operate platform business models as an advisor and consultant. He earned his doctoral degree from the Indian Institute of Management Ahmedabad.

¿1. Introduction to core concepts

a. What are business models?

b. How are platforms different from pipelines?

c. Platforms as networks - different sides to the platform

i. Compatibility complementarity and standards

ii. Consumption externalities

iii. Switching costs and lock-in

iv. Significant economies of scale

d. Simple vs multi-sided platforms

e. Core concepts

i. Network effects

ii. Value architectures

iii. Network mobilization

iv. Pricing and subsidies

v. Winner-takes-all dynamics

vi. Platform envelopment

2. Network effects

a. What are network effects

b. Direct (same-side) and indirect (cross-side network effects)

c. Positive and negative network effects

d. Leveraging network effects for growth

e. Products/ services and platforms

a. Platform value architecture (cost, choice, community)

b. Discovery

c. Matching

d. Transaction

e. Evaluation

f. The DMTE cycle

4. Penguin problems and network mobilization issues

a. Introduction to penguin problems

b. Challenges in network mobilization

c. Strategies to resolve penguin problems (10 of them)

5. Pricing and subsidies

a. Designing the money and subsidy sides

b. Criteria for subsidies

c. Pricing models (5 of them)

d. Pricing and its impact on WTJ, WTP, and WTS

6. Platform architecture - open/closed and shared/ proprietary platforms

a. Open and closed platforms

b. Shared and proprietary platforms

c. A matrix of open-closed and shared-proprietary platforms

d. The challenges of developing the ecosystem of complementors

e. Standards and platform growth

7. Winner-takes-all dynamics

a. What are WTA markets?

b. Positive and strong network effects

c. Multi-homing costs

d. No special preferences

e. Implications of WTA markets on complementors

f. Regulatory issues with WTA markets

8. Platform envelopment

a. What is the threat of envelopment?

b. Evaluating the threat when it is imminent

c. Envelopment mitigation strategies

i. Racing

ii. IP protection

iii. Caging of customers

d. Envelopment and diversification

9. Complementary business models

a. Overview of differences across business models

b. Complementarity across business models, say SaaS and platforms

c. Sources of synergies and costs

d. Impact of these synergies in platform development and scale/ scope

10. Contemporary issues in platforms

a. Platforms in contestable markets

b. Multi-point competition

c. Platform governance

d. Social impact of platforms

e. Managing international regulation

f. Costs of compliance (issues around privacy and monetization)

g. Future of platforms - new technologies (AI/ ML, blockchain)