Platform Business Model: an investigation of the strategies implemented at different stages of the value co-creation process

Abstract

This paper explores the strategies implemented by platforms operating in various sectors with a view to identify practices and initiatives throughout the process of value co-creation between the different groups of users interacting with each other. Despite the fact that the peculiarities of platform business models emerged commonly in debates encompassing the role of digitalization and the impact of new technologies on structures implemented by businesses, an investigation of strategies chosen by platforms at multiple levels of the value co-creation process with a distinction between the different categories of users has never been provided. The first chapter aims at presenting the existent literature review on platforms, defining their role from multiple perspectives, addressing the notions of ecosystem and network effects and finally draws the attention to the concept of value co-creation and to the contribution provided by various authors on pricing strategies. The second chapter explains the selection of a qualitative research method to analyze procedures, approaches and initiatives applied by platforms with reference to: attraction and retention of users, management of interactions between different groups, synergies creation, community building, trust reinforcement and pricing strategy development. Nine companies founded in five different countries and operating in various sectors ranging from home sharing services to vehicle rentals have been interviewed to collect information on the strategies adopted and to identify widespread solutions and noteworthy peculiarities. Following a description of the companies interviewed and an illustration of the answers provided by each platform, the third chapter presents an analysis of the results obtained from the interviews. Some important observations are made at distinct stages of the process of value co-creation. Concerning the attraction phase, the practices implemented to reach new users present differences among the various groups making up the platform and the collaborations introduced by companies are found to be mainly directed to the side of the platform not receiving monetary value from the transaction. Trust emerges to be an essential factor in platforms and is strengthened through tools ranging between the management of the payment process and the implementation of feedback systems. Differences can be underlined between the groups of users also at the level of loyalty programs, with a higher difficulty in attracting the side of the platform obtaining the monetary value from the transaction. This side of the platform generally appears also to be characterized by a more complex process of registration. Finally, the cases analyzed show that the hardest category of users to retain after the attraction is composed by the side of the platform not receiving monetary value from the transaction.