Makarand Mody, Jochen Wirtz, Kevin Kam Fung So, Helen HaeEun Chun and Stephanie Q. Liu
This article examines the new phenomenon of the convergence of platform and pipeline business models. It examines the potential synergies and challenges for platforms to add…
Abstract
Purpose
This article examines the new phenomenon of the convergence of platform and pipeline business models. It examines the potential synergies and challenges for platforms to add pipeline components and vice versa for pipeline businesses.
Design/methodology/approach
This paper uses a conceptual approach that synthesizes and integrates the literature from service, hospitality, and strategy, and supplements them with two illustrative mini-case studies.
Findings
While the extant literature typically focuses on the dichotomy between incumbent pipeline businesses that create value by controlling a linear series of activities and network effects-driven platforms, we differentiate between two types of platform business models (i.e. platforms with asset control and platforms with peer-provided assets). Further, we identify three common pathways of convergence; that is, pipelines moving towards (1) platforms with asset control and (2) those with peer-provided assets, and (3) platforms with peer-provided assets adopting defining business characteristics of pipelines. Furthermore, we contrast key characteristics of the three business models and examine potential synergies and challenges for business model convergence. Our findings suggest that convergence from pipelines to platforms with asset control seems to be a natural extension that offers many potential synergies and relatively minor challenges. In contrast, convergence from pipelines to platforms with peer-provided assets is likely to encounter more serious challenges and few synergies. Finally, the synergies and challenges of convergence from platforms with peer-provided assets to pipelines seem to be in between the other two in terms of synergies and challenges.
Practical implications
This article helps managers think through key considerations regarding potential synergies to develop and challenges to mitigate for embarking on convergence strategies between pipeline and platform business models.
Originality/value
This article is the first in the service, business model and strategy literature to identify, define, and conceptualize business model convergence between platforms with asset control, those with peer-provided assets and pipeline businesses. It is also the first to examine potential synergies and challenges these different paths of business model convergence may entail.
Details
Keywords
Jochen Wirtz, Kevin Kam Fung So, Makarand Amrish Mody, Stephanie Q. Liu and HaeEun Helen Chun
The purpose of this paper is to examine peer-to-peer sharing platform business models, their sources of competitive advantage, and the roles, motivations and behaviors of key…
Abstract
Purpose
The purpose of this paper is to examine peer-to-peer sharing platform business models, their sources of competitive advantage, and the roles, motivations and behaviors of key actors in their ecosystems.
Design/methodology/approach
This paper uses a conceptual approach that is rooted in the service, tourism and hospitality, and strategy literature.
Findings
First, this paper defines key types of platform business models in the sharing economy anddescribes their characteristics. In particular, the authors propose the differentiation between sharing platforms of capacity-constrained vs capacity-unconstrained assets and advance five core properties of the former. Second, the authors contrast platform business models with their pipeline business model counterparts to understand the fundamental differences between them. One important conclusion is that platforms cater to vastly more heterogeneous assets and consumer needs and, therefore, require liquidity and analytics for high-quality matching. Third, the authors examine the competitive position of platforms and conclude that their widely taken “winner takes it all” assumption is not valid. Primary network effects are less important once a critical level of liquidity has been reached and may even turn negative if increased listings raise friction in the form of search costs. Once a critical level of liquidity has been reached, a platform’s competitive position depends on stakeholder trust and service provider and user loyalty. Fourth, the authors integrate and synthesize the literature on key platform stakeholders of platform businesses (i.e. users, service providers, and regulators) and their roles and motivations. Finally, directions for further research are advanced.
Practical implications
This paper helps platform owners, service providers and users understand better the implications of sharing platform business models and how to position themselves in such ecosystems.
Originality/value
This paper integrates the extant literature on sharing platforms, takes a novel approach in delineating their key properties and dimensions, and provides insights into the evolving and dynamic forms of sharing platforms including converging business models.
Details
Keywords
HaeEun Helen Chun and Michael Giebelhausen
The purpose of this research is to first demonstrate a “green backlash” effect whereby evaluations of a large service organization decrease after the organization announces a new…
Abstract
Purpose
The purpose of this research is to first demonstrate a “green backlash” effect whereby evaluations of a large service organization decrease after the organization announces a new green practice and second, explore how the presence of green competitors might moderate this effect.
Design/methodology/approach
The approach includes one exploratory in‐depth interview study and three follow‐up experiments.
Findings
The results indicate that consumers percieve large companies to be lacking in credibility and that when a large service organization announces the adoption of a green practice, evaluations of that firm may actually decrease, i.e. a green backlash. Additionally, it is observed that the opposite is true when consumers are aware of a credibly green competitor. In these circumstances, large players are significantly worse off if they do not also adopt green practices. Initially it was hypothesized that the large company would need to imitate the credibly green competitor. However, the results suggest that a reversal of the backlash effect can occur even if the companies are engaged in very different green activities.
Research limitations/implication
The context of the experiments is limited to the food service industry.
Practical implications
The practical implication for large service organizations is that in markets where there is no green competitor, they should consider not promoting their green practices. However, these organizations need to have programs in place when a cedible competitor inevitably arrives. The practical implication for environmentalists is the finding that large companies can be forced to go green simply via the existence of a small credibly green competitor.
Social implications
The social implications of this research is that small green service providers are an important catalyst and necessary ingredient in the transition to a more sustainable service economy.
Originality/value
This article is the first to empirically demonstrate a green backlash effect and identify conditions under which this effect might be reversed.