This course is aimed at students, managers, executives, investors, and entrepreneurs interested in creating, managing, or understanding business platforms. Firms such as Amazon, Apple, Facebook, SalesForce, and SAP operate as ecosystems in which third parties add value. Topics include startup, converting existing businesses, openness, network effects, innovation, cannibalization, pricing, governance, and competition. The course will combine rigorous theory with real-world experience. Case studies will emphasize practical approaches and draw from social media, healthcare, entrepreneurship, enterprise software, mobile services, and consumer products to provide foundations and definitions. This course will also demonstrate established economic principles from the literature on industrial organization, two-sided network effects, information asymmetry, agency, pricing, and game theory. A basic background in microeconomics is recommended as a prerequisite.
Platforms are economically important and widely observed in modern economies. For example, HMOs match patients and physicians. Real estate and auction networks match buyers and sellers. Airline reservation systems match travelers to airline flights. However, thanks largely to technology, platforms are becoming much more prevalent. New platforms are being developed and traditional businesses are being reconceived as platforms e.g. U.S. Postal Service, newspapers (Huffington Post). Retail electric markets are evolving into platforms that match consumers with specific power producers, allowing them to express their preferences for source of supply. In creating strategies for platform markets, managers have typically relied on assumptions and paradigms that apply to businesses without network effects. As a result, they have made decisions in pricing, supply chains, product design, and strategy that are inappropriate for the economics of their changing industries.