Class Session 7

Strategic Management
This reading material has been prepared to teach the Industry Competitive Landscape Analysis course in Trim. 2 to 1st year full-time MBA students of NMIMS (2023-24 batch) of Division L and Division G, and is intended for their study and learning.
Conveying the contents of these to anyone else, or the use of these for any other purpose, is expressly prohibited
Platforms
What are ‘platforms’?
• Platforms are business models (i.e., firms operating business models)
• that provide the facility for two (or more) groups of people or
organizations to come together and
• undertake an activity involving an exchange
• an exchange which is commercial in nature (?)
• and meets certain business or consumption requirements of both
groups
What are some ‘brick and mortar’ examples of
platforms?
• Brock and Mortar stock exchanges

• bring together listed companies and prospective shareholders together (further mediated by brokers)
• Mandis of different kinds – e.g., vegetable markets
• Auctions
• Agency arrangements in B2B sales

• Where a sales agent representing a company brought together his company and consuming firms
needing his company’s product
• Brokerages
• Retailers and Supermarkets?

• Not quite – they buy and resell, and are not really a marketplace
What are platforms in the context of the
current tech-enabled world?
• E-commerce sites – that bring together sellers of different products
and buyers
• Amazon, Flipkart
• Reliance Digital, Tata Cliq
• Pharmeasy – for sale of pharmaceutical products
• Swiggy (Instamart and Food) , Zomato (Zomato – food, and Blinkit)
• Big Basket, JioMart (Groceries and other personal products)
• B2B E-commerce sites?
• Udaan and Ninjacart– wholesale business, and business from manufacturers
to retailers
• Indiamart –B2B marketplace
Platforms for service …..
• Bookmyshow – comprehensive entertainment options
• Makemytrip, Cleartrip, Goibibo etc : Travel and lodging solutions
• Magicbricks, 99acres – real estate : sale, purchase and renting
• Shaadi.com – matchmaking and marriage portal
• Policybazaar.com – A platform for Insurance companies and customers
• Practo.com – A platform for medical practitioners and patients
• Uber and Ola – a Platform for drivers and customers/passengers

What are other platforms?
• Google
• Google Search
• Brings together providers of goods and services and their potential consumers
• also, any/all individuals and firms that undertake online Pc/mobile-based search and
advertisers
• Youtube
• Individuals and firms of several types providing a wide-variety of products and services,
and potential users and customers
• Advertisers and interested individuals/firms
Other platforms - Platforms for app
development….
• Many of the Operating Systems have also become platforms – for
software developers to provide products/solutions to consumers
• Google and Apple :
• The Android Operating System and the Apple iOS
• Used by programmers and developers to provide app’s to consumers using android or
Apple mobile phones
• The Microsoft Windows O/S:
• Similarly used by developers to provide software and solutions for use by consumers
• Examples of such developers : Adobe, McAfee, among others
• The no. of such developments is large
Other platforms - Platforms for app sales…
• The app’s and software actually developed by the firms and their
programmers are provided to customers through the virtual App
Stores of these companies:
• Google Play
• Apple App Store
• Microsoft Store
• These are the platforms for sales of the developed app’s

• The O/S’s are the platforms for development of the app’s
Other platforms - Platforms for game
development and gaming…
• Gaming sites
• These are sites that bring together gamers and gaming companies (the
‘providers’ of the platform are the mobile or PC companies)
Other platforms - Payment gateway Service
Providers…
Other platforms - Social Media..
• Social Media sites are the other important category of platforms
• E.g., Meta :
• Facebook, including Whatsapp and Instagram – which provide interfaces for companies
and individuals to interface among as well as between each other, for social and
commercial needs
Examining now E-commerce firms as a
specific, important class of Platforms
How do the E-Commerce platforms manage their
business faced with this kind of a hostile business
environment?
• The platforms need to follow an appropriate, effective strategy
• One of the generic strategies of
• Differentiation
• Cost Leadership, or
• Focus
• The requirement is an overall outstanding digital, navigation
experience
• A secure and reliable way of making payments and getting delivery
• This requires
• tech and digital capability of a very high order.
• Non-Platform D-C offerings have clunky websites
• a highly evolved, data and analytics driven, and infrastructure-enabled
Supply Chain
• Non-platform D->C offerings have an extremely poor delivery track record
Examining now, Platforms viewed generally….
The assets and resources that characterize
platform businesses
• The tech knowledge and capabilities in constructing and running
platforms viewed generally are equally an important internal resource
• as much as for E-Commerce Platforms
platform businesses
• The tech knowledge and capabilities need to provide a seamless, quick,
and trouble-free experience, to hosts, service
• For e.g., in a platform such as Facebook, the experience of accessing the a

Facebook Company Business Page should be a ‘taken-for-granted’ error-
free experience
• The navigation, web-page changes on screen-clicks, the quality of videos and images
should be of the highest quality irrespective of wifi/broadband speeds, and across
tier 1, 2, 3 cities, towns and even rural areas
• The applications should network well with mobile and Pc operating systems, and also
progressively with devices such as internet TV’s
platform businesses
• However, the most important resource of the platform viewed
generally is an external resource –
• the network of customers and producers/suppliers built by the platform
• These lead to a phenomenon called network effects
Understanding network effects…*
• Are there platforms that deal only with a single set of users?
*Adapted from the paper by Profs. Feng Zhu

and Marco Iansiti (ref. the course outline for
details of the publication and paper/article)
Are there platforms* that deal only with a
single set of users?
• E.g.,
• The value of a product such as mobile phones increases as more users of
mobile phones come on board
• As also the value of Social Media sites, and
• that of online games/gaming sites
• that of dating and matrimonial sites
• These products/services are platforms – these largely digital platforms

which are the backbone of a final offering incorporating customer
interactions *Adapted from the paper by Profs. Feng Zhu
• Customer interactions co-create the Use Value details of the publication and paper/article)
Network effects of different types…..*
• E.g., Use Value of a product such as mobile phones increases as more users of
mobile phones come on board
• As also Use Value of Social Media sites, and
• Use value of online games/gaming sites
• Use Value of dating and matrimonial sites
• These are examples of single-sided network effects details of the publication and paper/article)
• Or Direct Network Efforts

• The value co-created by the consumers through their interactions has a
dimension independent of the firm (i.e., the platform)
• e.g., the nature and quality of interactions
• It is important to understand that the interactions are a large influence on the
perceived value of the platform…
• Hence, the platform’s strategy should include as a large component
• the profile of people to be attracted and the product that offers the interaction
environment
Network effects of different types… Multi-sided networks*
• Network effects that offer Use Value from scaling up the nos.
of users – not just consumers
• are from multi-sided networks or platforms
• How is Use Value creation by multiple sides of a platform
different?

Network effects of different types… Multi-sided networks*
• How is Use Value creation by multi-sided platforms different?

• Use Value creation by multi-sided platforms involves cross-side
network effects and indirect network effects
• There are two (or more) different groups of users
• typically, sellers or service providers as one type of group, and
consumers/buyers as the other
• The nature of the network effect –
• the more the consumers/buyers, the more the sellers/service providers
• the more the sellers -> more variety and choice; hence, more consumers
Examples – multi-sided networks*
• B2C E-commerce sites – that bring together sellers of different
products and buyers
• Amazon, Flipkart
• Pharmeasy – sale of pharmaceutical products
• Swiggy (Instamart and Food) , Zomato (Zomato – food, and Blinkit)
• B2B E-commerce sites
• Udaan and Ninjacart– wholesale and business sourcing from manufacturers
• Indiamart –B2B marketplace
Other examples – multi-sided networks*
• Bookmyshow – comprehensive entertainment options
• Makemytrip, Cleartrip, Goibibo etc : Travel and lodging solutions
• Magicbricks, 99acres – real estate : sale, purchase and renting

Other multi-sided networks *– Operating systems :
as a medium for app development….
• How many sides do each of the above OS’s have as platforms?

The Android OS Platform : 3 –sided network
effects*
Mobile Phones (Hardware) ----- > Android Systems (the O/S ) <----- Mobile phone users (Consumers)
App Developers ----- > Android Systems (the O/S) <----- Mobile phone users (Consumers)
App Developers ----- > Android Systems (the O/S) <----- Mobile Phones (Hardware)
Microsoft Windows – similarly, a platform with 3-sided *Adapted from the paper by Profs. Feng Zhu
network effects and Marco Iansiti (ref. the course outline for
Apple – MacOS and iOS : this is a platform with 2-sided

network effects
For whom does a multi-sided platform*
principally create value?

An important feature of platforms….*
• Platforms deal with an ‘ecosystem’ of consumers and producers
• Their connect and the quality of their regular engagement is an essential part
of the business model
• The platform thus needs to build equity with both these partners
• This is to be distinguished from the exclusive focus on building equity with
consumers evidenced in the conventional businesses

Competitive advantage of multi-sided platforms…*
• Competitive advantage of platforms is an evolving area

• it further requires multiple value propositions to deliver an expanding
User Base
• adjacencies – e.g., flight+hotels+holidays+can rentals by Makemytrip
• unrelated diversification and omnichannel presence : Reliance & Jio; Walmart
&Flipkart; Amazon with Prime
• Development of ‘Hubs’ – Meta and Google appropriating the mobile telephony
proposition; Omnichannel retail disrupting Modern Trade
• Is a multi-sided platform the preferred medium for value
creation compared to a single-sided platform*?
• A possibility that needs to be managed ….

• There could be conflicts in the Use Value propositions for some of
the different ‘sides’
• e.g., too many ad’s and links to partner websites in Facebook and Google
detract from Use Value to the final consumer *Adapted from the paper by Profs. Feng Zhu

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Strategic Management

• Brock and Mortar stock exchanges

• Mandis of different kinds – e.g., vegetable markets

• Agency arrangements in B2B sales

• Retailers and Supermarkets?

• Makemytrip, Cleartrip, Goibibo etc : Travel and lodging solutions

• Magicbricks, 99acres – real estate : sale, purchase and renting

• Shaadi.com – matchmaking and marriage portal

• Policybazaar.com – A platform for Insurance companies and customers

• Practo.com – A platform for medical practitioners and patients

• Uber and Ola – a Platform for drivers and customers/passengers

• The no. of such developments is large

• These are the platforms for sales of the developed app’s

• For e.g., in a platform such as Facebook, the experience of accessing the a

*Adapted from the paper by Profs. Feng Zhu

• These products/services are platforms – these largely digital platforms

• Or Direct Network Efforts

*Adapted from the paper by Profs. Feng Zhu

• How is Use Value creation by multi-sided platforms different?

• Makemytrip, Cleartrip, Goibibo etc : Travel and lodging solutions

• Magicbricks, 99acres – real estate : sale, purchase and renting

*Adapted from the paper by Profs. Feng Zhu

*Adapted from the paper by Profs. Feng Zhu

Apple – MacOS and iOS : this is a platform with 2-sided

*Adapted from the paper by Profs. Feng Zhu

*Adapted from the paper by Profs. Feng Zhu

• Competitive advantage of platforms is an evolving area

• A possibility that needs to be managed ….

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