Tuesday, July 15, 2008

Strategies for Platform Management (Media and Investment Banks)

By: Eisenmann, Thomas, Parker, Geoffrey, Alstyne, Marshall W. Van,
Harvard Business Review,
October 2006, Vol. 84, Issue 10

Companies in industries such as banking, and media make money by linking markets from different sides of their customer networks--audiences and advertisers (by media), for example. The distinct character of these business demands a new approach to strategy.

1 Challenge: Pricing the Platform
2 Challenge: Winner-Take-All Dynamics
3 Challenge: The Threat of Envelopment

1. See Geoffrey Parker and Marshall W. Van Alstyne, "Two-Sided Networks: A Theory of Information Product Design," Management Science (2005) and Jean-Charles Rochet and Jean Tirole, "Platform Competition in Two-Sided Markets," Journal of the European Economic Association (2003).

Thomas Eisenmann (teisenmann@hbs.edu)is an associate professor at Harvard Business School in Boston.

Geoffrey Parker (gparker@tulane.edu)is an associate professor at Tulane University’s A. B. Freeman School of Business in New Orleans.

Marshall W. Van Alstyne (mva@bu.edu)is an associate professor at Boston University’s School of Management and a visiting scholar at MIT’s Center for eBusiness in Cambridge, Massachusetts

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