Platform business models are not a new invention of the digital era. Platforms create value by facilitating transactions between two (or more) interdependent groups, and for a long time this has mainly happened in brick-and-mortar locations like bazaars, shopping malls or auction houses. With the rise of the Internet, transaction costs for connecting groups have dramatically declined, facilitating exchanges at an unprecedented scale. Unsurprisingly, many of the most valuable firms are platforms like Apple, Amazon, Facebook, Alibaba or Visa. Understanding platform-based business models is crucial for successfully managing a platform business or creating an own start-up because they differ greatly from traditional (linear) business models and applying the economics of traditional firms to platforms will generally lead to misguided strategies and wrong implications.
In this course, we draw on theoretical work to guide course participants in negotiating the challenges of platform-based business models, e.g. network effects and platform competition. While the course is not primarily technically focused, the technical aspects needed to understand firm behavior as well as the corresponding implications related to platforms will be covered and accompanied by relevant case studies presented in the context of leading examples of internet and technology platforms. During the course, we also touch upon issues like privacy and regulation.
The course will be particularly, although not exclusively, valuable to three types of students: (i) those who plan taking management positions in platform businesses, especially in those where technology plays an important role; (ii) those who anticipate consulting, i.e. firm strategy analysis, for platform businesses; (iii) those who intend to work for a regulatory agency with a primary focus on the digital economy.