Achieving Platform Play – Critical Success Factors

“The platform endgame has started” – this is how Handelsblatt described in December 2019 the current situation on the platform market. 

American internet platforms have long dominated the market for digital business-to-consumer platforms and are occupying antitrust authorities worldwide with their dominance. In the case of B2B business models, the dominance of a few platforms is not yet clearly evident. However, platform business models are on the rise in the industrial sector. Many platform providers are looking for a sustainable business model, sustainable monetization of their service offering and suitable differentiation from the competition. In addition, more and more mergers and takeover activities can be observed, which can be interpreted as first indications for an incipient consolidation of the platform landscape. 

In our re:think transformation model we pinpoint the platform game as the ultimate goal in the current business landscape. In order to achieve a platform-based company, leaders must not only adapt the business model, but also implement appropriate organizational structures and agile methods as well as leverage data by the means of modern technology. 

In order to move along on the business transformation axis we have identified the following critical success factors: 

1. Responsibility at C-Level 

In the case of platform endeavors of large organizations, management has two central tasks: On the one hand, it has to protect the platform team from the structures and processes of the core business, for example, by treating the team like an internal startup and shielding it from the core business. On the other hand, it is their responsibility to exploit synergies between existing and new business models. For platforms with a small company size and historically grown structures, management must be more concerned with simplifying coordination and decision-making processes. If you want to know more about how to manage change in your organization, please get in touch with Johanna Schmitt.

2. Focus on the Value Proposition 

A platform must always generate value for all participants. The added value can be generated on three levels: bringing together demand and supply within a community, data management and intelligence, and by offering the technological infrastructure. In addition, successful platforms often focus on a niche and open one side of the platform first. Later, the other sides follow suit and the platform is expanded to other industries. In doing so, the offerings must always be aligned with demand. This balance is important to continuously deliver on the value proposition for partners.  

3. Optimization and quality of operations 

It is of utmost importance for platforms to achieving critical mass and optimizing openness. In platform ecosystems, roles and positions in the market are floating and constantly changing. Therefore, the strategies of partnering and competing companies must always be observed and incorporated into one’s own strategy. Last but not least is the optimization of product quality and operational processes. High quality and reliability standards are considered to be a characteristic of the B2B environment. If you want to optimize your quality of operations please get in touch with Benedict von Eisenhart Rothe have a look at our process offering. 

The platform endgame has not only started but is at its peak. At re:think Innovations, we have expertise in guiding companies through transforming digital business models. If you want to talk about it or need some help, just drop us an email!  

by Johanna Schmitt, Business Consultant at re:think Innovations