Peculiarities of business models of digital platforms

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


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.


Metrics Loading ...

Author Biography

Ruslan G. Pozhidaev, Voronezh State University

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


Abdelkafi, N., Raasch, C., Roth, A. et al. (2019) Multisided platforms. Electronic Markets. 29, 553–559. DOI: 10.1007/s12525-019-00385-4

Afuah, A. & Tucci, C. L. (2000) Internet Business Models and Strategies: Text and Cases. New York, McGraw-Hill Higher Education.

Akbar, Y. H. & Tracogna, A. (2018) The sharing economy and the future of the hotel industry: transaction cost theory and platform economics. International Journal of Hospitality Management. 71, 91–101. DOI: 10.1016/j.ijhm.2017.12.004

Alt, R., & Zimmermann, H.-D. (2019) Electronic markets on platform competition. Electronic Markets. 29(2), 143–149. DOI: 10.1007/s12525-019-00353-y

Altman, E. J. & Tushman, M. (2017) Platforms, Open/User Innovation, and Ecosystems: A Strategic Leadership Perspective. Advances in Strategic Management. 37, 177–207 DOI: 10.1108/s0742-332220170000037007

Andreassen, T. W. et al. (2018) Business model innovation and value-creation: the triadic way. Journal of Service Management. 29 (5), 883–906. DOI: 10.1108/josm-05-2018-0125

Aulkemeier, F., Iacob, M., & van Hillegersberg, J. (2019) Platform-based collaboration in digital ecosystems. Electronic Markets. 29 (4), 597–608. DOI: 10.1007/s12525-019-00341-2

Baden-Fuller, Ch. & Mangematin, V. (2013) Business models: A challenging agenda. Strategic Organization.11 (4), 418–427. DOI: 10.1177/1476127013510112

Benoit, S. et al. (2017). A triadic framework for collaborative consumption (CC): motives, activities and resources & capabilities of actors. Journal of Business Research. 79, 219–227. DOI: 10.1016/j.jbusres.2017.05.004

Caillaud, B. & Jullien, B. (2003) Chicken and Egg: Competition Among Intermediation Service Providers. Rand Journal of Economics. 34(2), 309–328. DOI: 10.2307/1593720

Chen, Y. J. et al.(2020) Innovative online platforms: research opportunities. Manufacturing & Service Operations Management. 22 (3), 430–445. DOI: 10.1287/msom.2018.0757

Chesbrough, H. (2006) Open Business Models: How to Thrive in the New Innovation Landscape. Boston: Harvard Business School Press.

Cusumano, M. A., Gawer, A. & Yoffie, D. B. (2019) The business of platforms. In Strategy in the age of digital competition, innovation, and power. New York, HarperCollins.

Daiberl, C. et al. (2019) Design principles for establishing a multisided open innovation platform: Lessons learned from an action research study in the medical technology industry. Electronic Markets. 29 (4), 1–18. DOI: 10.1007/s12525-018-0325-2

Dolnicar, S. (2018) Unique features of peer-to-peer accommodation networks. Business. 1–14. DOI: 10.23912/9781911396512-3599

Duch-Brown, N. (2017) The competitive landscape of online platforms. Economics. 04.

Evans, D.S. & Schmalensee, R. (2016) The Matchmakers: The new Economics of Multisided Platforms. Boston, Harvard Business Review Press.

Fehrer, J. A., Woratschek, H. & Brodie, R. J. (2018) A systemic logic for platform business models. Journal of Service Management. 29 (4), 546–568. DOI: 10.1108/josm-02-2017-0036

Frenken, K. & Schor, J. (2017) Putting the sharing economy into perspective. Environmental Innovations and Societal Transitions. 23, 3–10. DOI: 10.1016/j.eist.2017.01.003

Gawer, A., & Cusumano, M. A. (2014) Industry platforms and ecosystem innovation. Journal of Product Innovation Management. 31 (3), 417–433. DOI: 10.1111/jpim.12105

Gawer, A. & Phillips, N. (2013) Institutional Work as Logics Shift: The case of Intel’s Transformation to Platform Leader. Organization Studies. 34 (8), 1035–1071. DOI: 10.1177/0170840613492071

Hagiu, A. & Rothman, S. (2016) Network effects aren’t enough. Har-vard Business Review. 94 (4), 64–71.

Hagiu, A. & Wright, J. (2015) Marketplace or Reseller. Management Science. 61 (1), 184–203.

Jacobides, M. G., Cennamo, C. & Gawer, A. (2018) Towards a Theory of Ecosystems. Strategic Management Journal. 39 (8), 2255–2276. DOI: 10.1002/smj.2904

Johnson, M. W., Christensen, C. M. & Kagermann, H. (2008) Reinventing your business model. Harvard Business Review. 86 (12), 57–68.

Kenney, M., Rouvinen, P., Seppälä, T. & Zysman, J. (2019) Platforms and industrial change. Industry and Innovation. 26 (8), 871–879. DOI: 10.1080/13662716.2019.1602514

Kenney, M. & Zysman, J. (2016) The Rise of the Platform Economy. Science and Technology (National Academy). 32 (3), 61–69.

Kumar, V., Lahiria, A. & Dogana, O.B. (2018) A strategic framework for a profitable business model in the sharing economy. Industrial Marketing Management. 69, 147–160. DOI: 10.1016/j.indmarman.2017.08.021

McIntyre, D. P. & Srinivasan, A. (2017) Networks, platforms, and strategy: Emerging views and next steps. Strategic Management Journal. 38 (1), 141–160. DOI: 10.1002/smj.2596

Mody, M.A., Suess, C. & Lehto, X. (2017) The accommodation experiencescape: a comparative assessment of hotels and Airbnb. International Journal of Contemporary Hospitality Management. 29 (9), 2377–2404. DOI: 10.1108/josm-11-2019-0351

Mody, M. et al. (2020) Two-directional convergence of platform and pipeline business models. Journal of Service Management. 31 (4), 693–721. DOI: 10.1108/josm-11-2019-0351

Muzellec, L., Ronteau, S. & Lambkin, M. (2015) Two-sided internet platforms: a business model lifecycle perspective. Industrial Marketing Management. 45 (1), 139–150. DOI: 10.1016/j.indmarman.2015.02.012

Nielsen, C. & Lund, M. (2014) An introduction to business models. SSRN Electronic Journal. 1(1). DOI: 10.2139/ssrn.2579454

Parker, G.G., Van Alstyne, M.W. & Jiang, X. (2017) Platform Ecosystems: How Developers Invert the Firm. MIS Quarterly. 41 (1), 255–266. DOI: 10.25300/misq/2017/41.1.13

Perren, R. & Kozinets, R.V. (2018) Lateral exchange markets: how social platforms operate in a networked economy. Journal of Market-ing. 82 (1), 20–36. DOI: 10.1509/jm.14.0250

Piscicelli, L., Ludden, G. D. & Cooper, T. (2018) What makes a sustainable business model successful? An empirical comparison of two peer-to-peer goods-sharing platforms. Journal of Cleaner Production. 172, 4580–4591. DOI: 10.1016/j.jclepro.2017.08.170

Porter, M. E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance. New York, Simon and Schuster publ.

Priem, R.L., Wenzel, M. & Koch, J. (2018) Demand-side strategy and business models: putting value creation for consumers center stage. Long Range Planning. 51 (1), 22–31. DOI: 10.1016/j.lrp.2017.07.007

Rangaswami, A., Moch, N., Felten, C., van Bruggen, G., Wieringa, J.E. & Wirtz, J. (2020) The role of marketing in digital business platforms. Journal of Interactive Marketing. 51, 72–90. DOI: 10.1016/j.intmar.2020.04.006

Teece, D. J. (2010) Business models, business strategy and innovation. Long Range Planning. 43(2-3), 172–194. DOI: 10.1016/j.lrp.2009.07.003

Thies, F., Wessel, M., & Benlian, A. (2016) Effects of Social Interaction Dynamics on Platforms. Journal of Management Information Systems. 33 (3), 843–873. DOI: 10.1080/07421222.2016.1243967

Tiwana, A. (2015) Evolutionary Competition in Platform Ecosystems. Information Systems Research. 26(2), 266–281. DOI: 10.1287/isre.2015.0573

Van Alstyne M. W., Parker, G. G. & Choudary, S. P. (2016) Pipelines, platforms, and the new rules of strategy. Harvard Business Re-view. 94 (4), 54–62.

Von Delft, S., Kortmann, S., Gelhard, C. & Pisani, N. (2019) Leveraging global sources of knowledge for business model innovation. Long Range Planning. 52 (5), Article number 101848. DOI: 10.1016/j.lrp.2018.08.003

Wirtz, J. et al. (2019) Platforms in the peer-to-peer sharing economy. Journal of Service Management. 30 (4), 452–483. DOI: 10.1108/josm-11-2018-0369

Wirtz, J. & Zeithaml, V. (2018) Cost-effective service excellence. Journal of the Academy of Marketing Science. 46 (1), 59–80.

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.