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Platform-based Business Models

BUS473 Platform-based Business Models

Spring 2024

  • Topics

    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.

  • Learning outcome

    Upon successful course completion, the student can:

    Knowledge

    • Discuss the common aspects of platform businesses.
    • Understand the difference between traditional firms and platforms.
    • Discuss the relevant literature on platforms.

    Skills

    • Apply the general theoretical insights to identify specific platform-business challenges.
    • Formulate applicable business strategies.
    • Communicate business strategies convincingly.

    General Competences

    • Understand complex problems and reduce them to their fundamental aspects
    • Work effectively both alone and in groups

  • Teaching

    Lectures, group work, case discussion, guest lectures.

  • Recommended prerequisites

    No prior knowledge necessary.

  • Credit reduction due to overlap

    Cannot be combined with NBD412

  • Compulsory Activity

    Physical presence in 3 out of 4 guest lectures is required for participation in the exam.

  • Assessment

    The assessment is based on two components:

    • One group assignment (min. 3 students, max. 5 students) which has to be submitted latest April 30.
    • 2 hour individual home exam.

    The group assignment counts 2/3 and the individual home exam 1/3 to the final grade

    The assignment and the answers in the exam have to be written in English.

    Both elements have to be taken in the same semester.

  • Grading Scale

    A - F

  • Literature

    General reading:

    • Parker G.G., M.W. Van Alstyne and S.P. Choudary (2016), Platform revolution: How networked markets are transforming the economy and how to make them work for you. W.W. Norton & Company, Inc., New York.
    • Evans D.S. and R. Schmalensee (2016), Matchmakers: The new economics of multisided platforms. Harvard Business Review Press, Massachusetts.
    • Evans D.S. (2011), Platform economics: Essays on multi-sided businesses. Competition Policy International.

    A full reading list is available in Leganto.

Overview

ECTS Credits
7.5
Teaching language
English.
Semester

Spring. Will be offered Spring 2024.

Course responsible

Professor Mohammed Mardan, Department of Business and Management Science.