Session 6: Digitalization of digital firms

Question 1

What companies rethink?

Answer 1

Their processes and business models

Question 2

What are the 3 digital platforms?

Answer 2

1. Transaction platforms
2. Innovation platforms
3. Hybrid platforms

Question 3

What is transaction platforms?

Answer 3

A platform is a business based on enabling value-creating interactions between external producers and consumers.

Examples: Amazon marketplace, Ebay, AirBnB, Facebook Marketplace.

Question 4

What are the innovation platforms?

Answer 4

Infrastructures that enable rapid innovation and recombinational of modules

Examples: Windows, world-wide web, Amazon Web Services, Microsoft Azure

Question 5

What is hybrid platforms?

Answer 5

Combinations of transaction and innovation platforms

Examples: IOS+App Store, Android+Google Play, Facebook

Question 6

What digitalization enables?

Answer 6

• Digital products & services have different economics than traditional ones
• High operating margins (e.g., 80% is common)
• Easier customer reach via platforms (better go-to-market)
• Faster & cheaper scaling of successful services
• Bold bets cost less & pay back faster

Question 7

What are the giants companies can diversify into myriad businesses around their massive customer base?

Answer 7

Amazon, Apple and Google

Question 8

Globalizing a Digital Platform – Opportunities and Challenges

Answer 8

• Network Effects: Tend to decline when crossing borders
• Customer Acquisition: Requires strategies beyond just AI algorithms
• Local Adaptation: Necessitates local managers for country-specific needs
• Structural Adaptation: Platform structure must be adapted for each market
• Regulatory Compliance: Understand and adhere to local regulations