Executives often look at the network effects of digital platforms as a key source of competitive advantage — without understanding that platforms need to also leverage other factors at play in the local markets and among preferred customers. Network effects can help, but on their own, they offer very limited competitive value.
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- Opinion & Analysis
- Read Time: 10 min
Although traditional financial services companies now offer mass-market financial advice via “robo-advisers,” average U.S. customers seeking investment advice are still underserved — and platform-based digital powerhouses like Amazon are taking notice.
- Read Time: 5 min
Business success today requires taking part in open platform ecosystems. But too many world-class product and services companies find their platformization quests narrowly defined, and end up with constricted or conflicted implementations. The ability of information systems and devices to exchange data isn’t enough in and of itself. Instead, developing new capabilities is the key to platform innovation that will add value to an organization.
- Research Highlight
- Read Time: 12 min
The emergence of a handful of high-profile virtual monopolies built on digital platforms has directed a huge amount of attention to the network effects such platforms fuel. But not all platforms are equally powerful. There is a reason why Airbnb is a better business than Uber.
- Read Time: 5 min
A decade ago, Apple’s iPhone cornered the mobile phone market by developing a platform interface that expanded its product from a simple one-task tool to a multitask utility. Using platforms to gain competitive advantage is no longer unique to Apple — it is happening in other industries across the board as readily available platform options grow in number.
Zhang Ruimin, the CEO and chairman of the Qingdao, China, white goods giant Haier Group Corp., has done what most chief executives dare not even dream about. He blew up nearly the entire administrative structure of a global manufacturing enterprise, eliminating the 10,000 management jobs that once held it together, and reshaped the organization into a network of entrepreneurial ventures run by employees.
- Read Time: 17 min
There’s a great deal of enthusiasm about platform strategies these days. Entrepreneurs pitch their startups as the next Uber, the next Facebook, or the next Airbnb, while executives in established companies are retooling their strategies around platforms to drive growth and compete digitally. But creating a successful platform business is not easy — as economists Richard Schmalensee and David S. Evans explain in this MIT Sloan Management Review interview.
Digital technology has already upended the media and information sectors. It’s about to do the same to the manufacturing economy, and pave the way for what can be called the “pan-industrial” strategy.
Blockchain technology has the potential to transform how businesses are organized and managed. It allows companies to eliminate transaction costs and use outside resources as easily as internal resources. The implications for areas such as accounting, contract negotiation and enforcement, sales and marketing, and capital investment are myriad. Companies should start exploring how this technology could impact their industry and processes.
IoT, a “worldwide platform of platforms,” offers power for companies who can capture its value. Watch as Professor Marshall Van Alstyne, author of Platform Revolution, offers insights on how platform strategy and IoT combine to produce value for all players in the ecosystem, using his research and real-life examples. Learn what what platform strategy is and how companies are using IoT to advance their platform strategies
- Read Time: 5 min
AI-driven interactions between customers and brands will soon be occurring more often. Messaging platforms such as Facebook Messenger and Slack will combine with AI to make sense of text — both conversational and written — and offer services in real time. Companies can prepare for this shift by choosing a platform, running experiments, and begin introducing AI to their customers today.
- Read Time: 6 min
Research by MIT IDE Research Fellow Michael Schrage offers new insights into platform markets and network effects. Schrage postulates that the impact and influence of network effects is essential to understanding sustainable value creation in digital markets worldwide — especially, the value of customers and clients.
- Read Time: 8 min
If you really want to create value, forget about burning platforms and start building them. A platform, explain professors Geoffrey Parker and Marshall Van Alstyne, and Sangeet Choudary, founder and CEO of Platform Thinking Labs, in Platform Revolution: How Networked Markets are Transforming the Economy and How to Make Them Work for You, is a “business model that uses technology to connect people, organizations, and resources in an interactive ecosystem.”
- Read Time: 15 min
How can executives develop their skills as strategists? One way is to learn from the masters. The book Strategy Rules: Five Timeless Lessons From Bill Gates, Andy Grove, and Steve Jobs (HarperCollins, 2015) explores insights drawn from the careers of these former CEOs of Microsoft, Intel, and Apple. In a Q&A, the book’s authors, David B. Yoffie of Harvard Business School and Michael A. Cusumano of MIT Sloan, explain how strategic thinking is a capability that leaders — even the superstars — develop over time.
- Research Highlight
- Read Time: 9 min
Many of today’s most successful technology businesses— including Apple, Facebook, and Uber — are built on a platform-based business model. But the increasing popularity of platform strategies masks a difficult truth: Such strategies are hard to execute well, and they are prone to several common pitfalls. Those platform traps include growth with no strategic focus, pursuing an intermediate approach between the mass market and a niche, and overlooking the value proposition of partners.
- Read Time: 4 min
Social media platforms provide two key capabilities in the enterprise context — managing networks and sharing digital content. The problem is, with multitudes of platforms available — and features changing daily! — it’s hard to pick among them. Blogger Gerald C. Kane outlines a simple method for making optimal decisions about which social media platforms an enterprise should use.
- Read Time: 2 min
“Increasing awareness of business models and the spectacular MSP successes from the past decade have prompted many entrepreneurs and investors to attempt building or identifying ‘the next eBay,’” writes Andrei Hagiu, an associate professor in the strategy group at the Harvard Business School. But successful MSPs such as PayPal, eBay and Alibaba are the exception rather than the rule. Haigi offers four observations about what new companies can do to position themselves to be among the winners rather than the losers.
- Research Feature
- Read Time: 19 min
A company’s digital business model describes how the enterprise interacts digitally with its customers to generate value. If you lack a good digital business model, your customers may leave you behind. This article presents a framework to help enterprises compete digitally with three capabilities: their content, customer experience and platform. The framework is illustrated with case studies of top performers like Amazon, Apple, LexisNexis and USAA and results from an effective practices survey.
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