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The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power

This lecture summarizes some key findings from a new book by Michael Cusumano, Annabelle Gawer, and David Yoffie. We will examine myths and realities associated with digital platforms – businesses that connect two or more market sides, and have supply or demand sides driven by network effects.  Platform companies are now the most valuable companies in the world and the first trillion-dollar businesses. The talk will focus on how digital platforms differ from conventional product or service businesses, and why some markets produce spectacular winner-take-all-or-most outcomes while others result in spectacular financial losses. We will discuss why “platformizing” a bad business does not make it a good business, and how platforms have become “double-edged swords.”  That is, platforms have an equal ability to organize economic activity efficiently as well as to abuse increasingly powerful market positions or be subject to misuse by platform participants.  About the Series  Sponsored by the System Design & Management (SDM)  program at the Massachusetts Institute of Technology (MIT), the MIT SDM Systems Thinking Webinar Series features research conducted by SDM faculty, alumni, students, and industry partners. The series is designed to disseminate information on how to employ  systems thinking to address engineering, management, and socio-political components of complex challenges.