BUILDING A PLATFORM FOR GROWTH - PA Consulting
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BUILDING A PLATFORM FOR GROWTH Platform business models are driving world-beating success
Transcript of BUILDING A PLATFORM FOR GROWTH - PA Consulting
BUILDING A PLATFORM FOR GROWTH
Platform business models are driving world-beating success
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WE’RE NOW IN A PLATFORM WORLD
The world has changed. Proliferating choice and hyper-connectivity mean customers are more empowered than ever. Technology and generational dynamics have changed the way people connect and relate, placing customers at the centre of their own universe – the network of people and organisations who inform, inspire and influence them.
At the same time, digitalisation is reshaping traditional industry borders, letting established businesses redefine what they do. Is Amazon in retail, payments, devices, infrastructure, drones or entertainment? Is Apple in devices, media, health, communications, software, wearables, retail or payments? Is AT&T in telecoms, connected health, entertainment, cloud computing or the connected home?
The linear business models of the past, where companies focused on delivering a product or service in an efficient value chain, don’t meet customer expectations in this world. So, large organisations need to rethink their strategy to discover how they can play a role in these new digital business ecosystems.
Platform businesses, from social giants like Facebook to incumbents like Philips Healthcare and ING bank, are flourishing in these ecosystems. In fact, seven of the ten most valuable companies in the world use platform business models.
The opportunity of being a platform business
Platform business models generate high profit margins compared to traditional businesses because they are:
• digital-first, letting them adapt quickly to customer needs
• asset-light, letting them scale fast with limited costs
• network builders, gaining value with each new participant.
For incumbent organisations, capturing the opportunity to grow depends on running a platform business model, either by building a platform or partnering with one.
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WHAT IS A PLATFORM BUSINESS MODEL?
A platform business model creates value by facilitating interactions between groups using a common technology platform. These include aggregation platforms (like eBay), social platforms (like Facebook), mobilisation platforms (like Upwork) and learning platforms (like TED Talks).
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And it’s not just digital-natives making a success of platforms, traditional businesses are too. Siemens Mobility, for example, is creating a platform for getting around, while ING has launched Yolt to aggregate people’s bank accounts.
There are four main groups in the platform ecosystem:
1. consumers use products and services on the platform
2. producers offer products and services on the platform
3. partners are additional service providers looking to improve market access
4. platform owners control intellectual property and governance (‘control point’).
The role of the platform business is to provide a governance structure that facilitate interactions at scale to unleash network effects – the exponential growth in value that comes with each new user of the platform.
THE SHIFT FROM PIPELINE BUSINESS MODEL TOWARDS A PLATFORM BUSINESS MODEL
PIPELINE
Producer Unit of value moving through the pipe Consumer
PLATFORM Governing interactions control point
Producer Value exchange Consumer
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HOW TO DEVELOP AND INTEGRATE A PLATFORM BUSINESS MODEL
To build a platform business, organisations must carefully consider three stages: strategy, innovation and growth.
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PLATFORM STRATEGYOrganisations need to explore where and how they can apply a platform business model, define their role in the evolving ecosystem and map a frictionless journey to success.
To define your strategy, identify:
• potential growth areas
• the role that leverages your core assets in the ecosystem
• which platform business model suits you best
• how best to leverage data to create a strong control point on the platform.
PLATFORM INNOVATIONAs the road to a platform business is challenging, large organisations need to focus on creating a structured innovation organisation. It needs an experimental mindset to create the right platform services and ways of working to scale successful ideas.
To create this structured innovation organisation, you need to:
• set the direction for platform innovation
• embed a platform-specific innovation methodology
• build platform innovation capabilities and metrics
• get the right people on board to scale platform innovation.
PLATFORM GROWTHOrganisations need to fundamentally change the way they operate to build, embed and grow a platform business. They need to orchestrate platform participation, focusing on interaction, quality and growth.
To ensure you can scale your platform business, you’ll need:
• the right capabilities to design, develop and manage a platform business
• an open technology landscape that lets you work with platforms, applications and other partners
• to govern a platform by setting rules and metrics for a wide spectrum of platform participants and partners.
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HOW WE CAN HELP
We’ve helped organisations around the world rethink their business and operating models, from global financial services institutions to market-leading drinks companies.
OUR PLATFORM INNOVATION SERVICES
OUR EXECUTIVE PLATFORM LEADERSHIP COURSEKickstart your understanding of the platform opportunities, enablers and barriers for your organisation, learn how to build your platform business model and find out about platform economics.
PLATFORM STRATEGYOur platform strategy consultants help you:
• identify your opportunities for growth
• design your platform strategy blueprint
• develop a roadmap for success.
9HOW WE CAN HELP
PLATFORM INNOVATIONOur platform innovation consultants ensure you can:
• accelerate your strategy, building and testing your platform MVP in the market
• embed a proven platform innovation approach
• implement your innovation organisation with the right capabilities and tools.
PLATFORM GROWTHOur experts support you as you:
• launch and scale your platform business to create positive network effects and a solid business model
• design your target platform architecture and build and embed the solution into your IT landscape
• build your platform capabilities and embed your platform operating model.
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GET IN TOUCH
To discuss how we can help your organisation design and embed a platform business model to deliver long-term success, contact:
HUGO RAAIJMAKERS
Innovation strategist and platform expert
BAS VAN ULZEN
Innovation strategist and platform expert
ANITA CHANDRAKER
Global Head of innovation
JIM MORGAN
Growth strategy and innovation expert
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About PA.
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As strategies, technologies and innovation collide, we create opportunity from complexity.
Our diverse teams of experts combine innovative thinking and breakthrough technologies to progress further, faster. Our clients adapt and transform, and together we achieve enduring results.
An innovation and transformation consultancy, we are over 2,800 specialists in consumer, defence and security, energy and utilities, financial services, government, healthcare, life sciences, manufacturing, and transport, travel and logistics.
We operate globally from offices across the Americas, Europe, the Nordics and the Gulf.
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