How to Maximize a Benefits of a Platform Economy- Valutrics
The enlargement of a digital economy has put it on march to comment for 25 percent of a whole universe economy by 2020, adult from 15 percent in 2005, according to new commentary from Accenture’s Digital Economic Value Index. As a result, some-more companies are branch to platform-based business models to gain on a rare opportunities today’s digital economy offers.
Identified as a Platform Economy, one of 5 trends summarized in The Accenture Technology Vision 2016 (along with Intelligent Automation, Liquid Workforce, Predictable Disruption and Digital Trust), a value of this trend lays in companies’ ability to emanate whole ecosystems that do many of a work to grow a business and expostulate strategies. The height has turn the business indication to open adult wholly new enlargement opportunities in any industry. This fast enlargement is now represented by a tip 15 open height companies, such as Amazon, Google and Alibaba, that comment for $2.6 trillion in marketplace capitalization worldwide.
Companies from any zone are origination clever plays to position themselves as a default height for their industry, including Philips (health care), Fiat (connected car), Disney (MagicBands), and Caterpillar (connected machines), among others. Take Philips for example: Philips has a confidant prophesy to reinvent health care. By rising a Philips HealthSuite height with 3 opposite cloud partners—Salesforce, Amazon AWS IoT and Alibaba AliCloud—the association is fixation a vital vital record gamble on a height business indication to unleash new marketplace opportunities, from studious government to information collection to consumer and home devices. Its idea is to grow marketplace share opposite a continuum of medical needs—from healthy living, impediment and diagnosis, to treatment, recovery, and home care—addressing a marketplace with a total value surpassing $100 billion.
By noticing and unleashing technology’s energy by a expansion of platform-based business models and strategies, leaders are capturing new enlargement opportunities, eventually pushing a many surpassing change in a tellurian macroeconomic sourroundings given a Industrial Revolution. This is reinforced by 81 percent of a Accenture Technology Vision 2016 consult respondents who determine that platform-based business models will turn partial of their organization’s core enlargement plan within 3 years.
Platform companies are personification an wholly opposite diversion with a new set of rules, requiring them to do some-more than change their record approach. Instead, it mandates companies to run their business off of opposite mercantile principles. There are 3 manners that underpin a Platform Economy that can assistance companies improved know how to maximize a thriving opportunities:
*Network Effects/Two-Sided Market: When dual user groups (typically, writer and consumer) beget network value for any other, there are mutual advantages that beget demand-side economies of scale. The network effects of platforms, with some-more connected users and transactions, expostulate value origination and scale.
*Distribution Power Law: Platform business models that capacitate scale concede others to beget increase in a “long tail” of a placement curve, avoiding abating earnings compared with normal (linear) value sequence models.
*Asymmetric Growth and Competition: The direct of a core marketplace is driven by interrelated markets, that are mostly subsidized (or free) to users and that mostly cranky attention lines. Asymmetric foe exists when dual companies go after marketplace opportunities with really opposite approaches and resources.
The Platform Economy represents a wilful mercantile shift–from supply-side to demand-side economies of scale. This formula in companies formulating value by drumming into resources and ability that they don’t have to own. Apple, for example, has mastered demand-side economies of scale with a iOS App Store. Launched in 2008, a iOS App Store is an ecosystem of scarcely 380,000 developers that combined 1.5 million applications that have been downloaded some-more than 100 billion times. They have generated $33 billion in sales by a finish of Apple’s mercantile year 2015. Based on Apple’s 70/30 separate with developers, a App Store has generated $10 billion for a company, enabling Apple to collect a resources of a ecosystem–resources it does not need to own.
Whether a association “owns” a height ecosystem or is plugging into another’s, what matters is carrying both a height plan and a business imagination to feat it. Progress starts with a transparent bargain of that tools of a business are primary for instrumentation to height business models, along with those that are many exposed to variable attacks from other platforms.
To tarry and flower in today’s digital economy, companies contingency master a vital use of digital technologies to build successful height business models. Their business’ destiny depends on it.