Peculiarities of business models of digital platforms

Keywords: digital platform, business model, network effects, industrial analysis

Abstract

Subject. The article considers the peculiarities of business models of digital platforms with the emphasis on the industrial level of analysis. The following characteristics were defined as the main characteristics at the level: market forces, relationships between the participants of the platform, the structure of expenditures, economies of scale, network effects, and competitive advantage. These characteristics do not have any internal hierarchy but are interrelated and complementary. The main part of the article is preceded by an overview of the business model concept and classifications of digital platforms.
Objectives. To contribute to the understanding of peculiarities of business models of digital platforms.
Method. The methods used during the research included studying publications by foreign authors devoted to identifying the specific characteristics of digital platforms at different levels of analysis and monitoring publications dedicated to the activities of digital platforms, their impact on the modern economy and competition with companies of the traditional economy. The main hypothesis of the study was the assumption that both the characteristics of business models and the effects created by them go beyond the traditional models of production, services, and mediation.
Results. The authors described the content of each component of the industrial level of analysis, identified the specifics and effects driven by the peculiarities of digital platforms, including: the primary role of managing external communities rather than internal assets, which allows for a balanced build-up of all market forces in order to increase the number of transactions between them; the key importance of indirect network effects in the rapid and flexible scaling of supply and demand and the creation of value; factors for achieving a competitive advantage. The industrial level of analysis is necessary to develop a theoretical and methodological framework for the study of digital platforms. At the end, the article provides conclusions and identifies issues for future research related to the study of the organisation and operation of digital platforms.
Conclusions. The role of digital platforms in the modern economy will be strengthening and this will affect all new spheres of social and economic relations. Business models of digital platforms create and provide a new scale of direct interactions between the participants, variety and volume of transactions, and network effects. They provide for the balance between supply and demand and creation and exchange of values. Their scale is not comparable to business models of traditional economy. Therefore, there is a need in conceptual and methodological understanding and determination of peculiarities of business models of digital platforms.

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Author Biography

Ruslan G. Pozhidaev, Voronezh State University

Cand. Sci. (Econ.), Assoc. Prof. of Labor Economy and General Management Department

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Published
2022-09-30
How to Cite
Pozhidaev, R. G. (2022). Peculiarities of business models of digital platforms. Proceedings of Voronezh State University. Series: Economics and Management, (3), 144-158. https://doi.org/10.17308/econ.2022.3/9988
Section
Management