What is a platform business model?

PLATFORM BUSINESS MODEL DEFINITION: a business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers. Like Facebook, Uber, or Alibaba, these businesses don't directly create and control inventory via a supply chain the way linear businesses do.

What is an example of platform model?

Examples include Uber, Airbnb and Pinterest. This kind of business model is a two-sided platform. I first read about multi-sided platforms in a book called Business Model Generation by Osterwalder & Pigneur in 2010. Its examples included Apple, Visa, Google, eBay and Microsoft Windows.

What are examples of platform businesses?

Google, Facebook, YouTube, Airbnb, Uber, eBay, Alibaba, PayPal make use of the platform business model. In this article, I use the terms “platform business model,” “platform business” and “platform” interchangeably. Economists also call them multi-sided platforms (MSP).

Is Amazon a platform business model?

Sales: Amazon works as an ecommerce platform and sells its products on the platform. A considerable percentage of Amazon's revenue comes from the sales of these products. The company competes with other third-party sellers and brands to attract customers on the marketplace and promotes its own brand.

What are the benefits of a platform business model?

Platform business models grow faster and scale better.

Platforms that follow the platform business model can grow or scale rapidly because they don't own the resources that create the value, i.e. the applications, content, service providers, or products. Their growth isn't contingent upon resources or capital.

Master Class: Platform Business Models

How does a platform business work?

A platform is a business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers. In order to make these exchanges happen, platforms harness and create large, scalable networks of users and resources that can be accessed on demand.

How do platform companies make money?

The primary way these companies make money on the internet revolves around creating revenue through selling advertising.

What is the business model of Netflix?

Business Model Of Netflix – Revenue Model

It runs on a Subscription Video on Demand (SVOD) model. Subscribers pay for a monthly plan and are given access to a vast library of media—any time, anywhere. Thus, subscriptions are Netflix's main source of revenue. It also has a DVD rental on a subscription basis.

What is Apple's business model?

Apple's business model is based on innovation and consumer-centric devices. They are able to keep their base due to easy-to-use designs and data migration to new product lines.

What is Facebook's business model?

(FB), the company that owns Facebook, primarily makes money by selling advertising space on its various social media platforms. Those platforms include websites and mobile applications that allow users the ability to connect and communicate with family and friends.

How do you create a platform business model?

Is Netflix a platform business?

Netflix, for example, is not a platform business despite being a technology company. It's essentially a linear TV channel with a modern interface. Like HBO, it licenses or creates all its content. Watch the video below for more on why Netflix is as linear in its business as any other.

Is Uber a platform business model?

Uber is a is two-sided marketplace, a platform business model that connects drivers and riders, with an interface that has elements of gamification, that makes it easy for two sides to connect and transact. Uber makes money by collecting fees from the platform's gross bookings.

Is Apple a platform business?

Indeed, a large number of the world's most valuable companies by market capitalization in 2015 were platform companies, including five of the top 10 (Apple, Microsoft, Google, Amazon, and Facebook).

Is Facebook a platform business?

Facebook is a platform on which users can distribute content, play games and organize information, publishers can broadcast content, and advertisers deliver targeted advertisements. To understand Facebook's business model, we must understand Facebook's ecosystem.

What is the difference between traditional and platform business models?

The key difference between platforms and most traditional business models is that platforms are multisided. By definition, they cater to multiple user groups. Platforms create value by bringing these people and businesses together and enabling them to exchange value.

What is Walmart's business model?

It is a publicly-traded family-owned business. The Walton family owns the company. It was the largest U.S. grocery retailer in 2019. The business model of Walmart primarily revolves around brick-and-mortar retail, however; it is gaining momentum in e-commerce as well.

What business model does Starbucks use?

Starbucks is a retail company that sells beverages (primarily consisting of coffee-related drinks) and food. In 2018, Starbucks had 52% of company-operated stores vs. 48% of licensed stores. The revenues for company-operated stores accounted for 80% of total revenues, thus making Starbucks a chain business model.

What is Google business strategy model?

Google's Generic Strategy (Porter's Model)

The company offers products to everyone around the world. The generic competitive strategy of differentiation involves developing certain unique capabilities that make the business competitive. Google sets itself apart from competitors through the uniqueness of its products.

What is Airbnb's business model?

Airbnb business model is an aggregator business model just like Uber and OYO. They don't have the business model like hotels such as Hilton and Marriott. Just like Grubhub's business model, Airbnb also runs with the help of an online platform that connects each component in the model.

How do Spotify make money?

Spotify makes the majority of its money from its premium subscription service, Spotify Premium. In fact, $8.4 billion or 91% of Spotify's total revenue came from its subscription service in 2020.

Does Netflix lose money?

Netflix and other U.S. streaming video services lose about $25 billion a year in potential revenue due to password sharing, according to Citi analyst Jason Bazinet. He estimated that Netflix accounts for about 25% of that total, meaning that the streaming giant is possibly missing out on around $6 billion in revenue.

Are platforms profitable?

They all had comparable annual revenues of about $4.5 billion. But the platforms generated nearly twice the operating profits, had market values more than twice as high, and were growing about twice as fast. The platform businesses achieved these sales with half the employees.

What is a platform company?

A platform company is a business that creates foundational technology upon which other companies are born and scaled. The companies that have world-changing strategic exits or become large, sustainable and independent franchises are platform companies.

What is platform based approach?

Abstract. A platform based approach for product development allows companies to eliminate redundancies, efficiently utilize its resources and provide products for a wider market. The basic idea is to develop and share key components and to introduce new technologies in as many products as possible.