Markets and Multisided Digital Platforms
As Adam Smith proposed, the division of labour is limited by the extent of the market, making it key to specialization, resource allocation, and innovation. Contemporary digital market platforms harness the promises of individualized, tailor-made marketplaces through digitalization, thereby aiding specialization. How this is done and how the economic gains from such changes are distributed will be highly consequential in reforming market society and its key institutions.
The theme focuses on understanding the logic behind the emergence and establishment of platform giants and the market society they contribute to build. It includes studying the digital transformation and migration of market ecosystems, ensuing new patterns of data collection and value creation, as well as explore theassociated strategic challenges for incumbents and entrants. In addressing these issues, we draw on our combination of strategy and marketing competence and on engagement from key stakeholders directly involved in shaping our future markets.
The recent use of digitally supported multisided platforms is a dramatic, but logical extension of the ongoing delocalization of product markets, but also of factor markets like the ones for labour and capital. Based on an understanding of the fundamental nature of platforms (both in a marketing and production context) and their institutional embeddedness, we explore the strategic actions of both entrepreneurs and incumbent firms and their effects on value creation and viability of business models. The research effort is thus an example of investigating the effects of strategic migration and shaping of markets and marketing under conditions of socio-political tension, climate change, and radical technological shifts.
Several interesting research topics emerge:
- How do platform firms design their markets and business models? What are the major strategic considerations? What patterns and templates can we distinguish, and how can they be classified? How are incumbent firms and their business models affected?
- What values are produced via multisided platforms? How are these values produced? How is (economic and other) value distributed among different stakeholders?
- How are the multiple sides of platforms strategically governed? How is marketplace access regulated? What are the archetypical business models?
- What role do the home country, institutional environment, and values of platform owners and operators play? Can we identify common and critical patterns and templates?
- How do regulators respond to safeguard reasonable prices and quality, freedom of entry, and the absence of restriction of goods, price fixing, forestalling, regrating and other unacceptable behaviors? What is the role of the platform owners, agreements, social conventions, and self-governing “guilds” in ensuring the legitimacy of these markets?
- What role do multisided platforms play as fora for civic rituals, dissemination of news, political and judicial activity in addition to making markets more efficient? What unintended consequences do they produce?