DIGITAL

TRANSFORMATION
IN BUSINESS

Lecturer: Nguyễn Thế Đại Nghĩa

Email: nghiantd@[Link]
DIGITAL TRANSFORMATION IN BUSINESS:
BUILD PLATFORMS, NOT JUST PRODUCTS
Nguyễn Thế Đại Nghĩa
nghiantd@[Link]
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CONTENTS
• THE PLATFORM BUSINESS MODEL
• HOW DIGITAL SUPERCHARGES PLATFORMS
• TOOL: THE PLATFORM BUSINESS MODEL MAP
• COMPETITION
• TWO RULES OF POWER IN VALUE TRAINS
• ORGANIZATIONAL CHALLENGES OF COMPETITION
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THE PLATFORM BUSINESS MODEL

Platforms facilitate direct interactions between
distinct types of customers.

Unlike products, platforms create value by

enabling connections, not just selling.

Key Distinction: Platforms involve "two-sided" or

"multi-sided" markets dynamically.

Example: Airbnb connects hosts and guests;

Uber connects drivers and riders.
Goal: Shift from owning assets to orchestrating
ecosystem interactions.
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THE PLATFORM BUSINESS MODEL

Origins: Two-Sided Market Theory
Derived from economic theories by Jean-Charles
Rochet and Jean Tirole.

Markets where one business serves two dependent

customer groups.
Efficient markets often see one side subsidizing the
other side.
Examples: Credit cards (Merchants pay, Users get
rewards).
Modern Application: Airbnb's Co-Host Network
expands side-to-side interaction.
03 | Origins
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PIPELINE VS. PLATFORM BUSINESS MODELS

Pipeline (Linear) Platform (Network) The Shift

Value is created Value is co-created by Moving from controlling
upstream and pushed users. The business resources to
downstream to the facilitates exchange. orchestrating resources.
customer. Linear supply Network effect focus. Asset-light and scalable.
chain focus.

Example: Traditional Example: YouTube, Key Driver: Digital

Manufacturing eBay Connectivity
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THE PLATFORM BUSINESS MODEL

Platform businesses are everywhere, appearing in a wide range of industries:
Retail: Taobao, eBay, Amazon Home appliances: Philips, Nest
Marketplace
Media: YouTube, [Link] Hospitality: Airbnb, TripAdvisor
Advertising: Google, Baidu, Transportation: Uber, Didi Kuaidi
Craigslist
Gaming: Xbox, PlayStation Education: Coursera, Udemy
Mobile computing: iOS, Android, Recruiting and job search:
Xiaomi LinkedIn, Glassdoor
Business software: SAP, Freelance work: Upwork, Amazon
Salesforce Mechanical Turk
Finance: PayPal, Kickstarter, Alipay
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THE PLATFORM BUSINESS MODEL

Let’s practice by filling the below form:

Platform Distinct customers, interacting directly, facilitated by the

platform

Airbnb Hosts, Renters

Ubers

Paypal

YouTube

Google

Salesforce
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THE PLATFORM BUSINESS MODEL

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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THE PLATFORM BUSINESS

MODEL

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
 11

THE PLATFORM BUSINESS MODEL

FOUR TYPES OF PLATFOMRS

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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THE PLATFORM BUSINESS

MODEL [Link]

• Why is AirBnB so
successful?
• What is the main problems of
AirBnb after a huge success
• What if other competitors
take this?
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HOW DIGITAL SUPERCHARGES PLATFORMS

Frictionless Scalable Growth On-Demand Trust Systems

Acquisition Access

APIs and Web Cloud computing Mobile ensures Digital identity

allow instant allows rapid platforms are and reviews
onboarding expansion accessible enable trust
globally. without physical anytime, between
assets. anywhere. strangers.
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HOW DIGITAL SUPERCHARGES PLATFORMS

The Engine: Network Effects
Direct Effects: Value grows with more users of the
same type (e.g., Facebook).
Indirect Effects: Value grows with more users of the
other type.

Virtuous Cycle: More Uber drivers = shorter wait

times = more riders.
Strategy: Overcoming the "Chicken and Egg" problem
is critical.

Result: Winner-takes-all dynamics in many digital

categories.
07 | Network Effects
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TOOL: THE PLATFORM BUSINESS MODEL MAP

Visual tool: Identifies participants and value
flows.
Goal: Understand how the platform creates
and exchanges value.
Difference: Focuses on interactions rather
than linear production processes.
Core questions: Who pays? Who creates
content? Who attracts whom?

Application: Analyze competitors or design

new strategies.

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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TOOL: THE PLATFORM BUSINESS MODEL MAP

Circle: Platform Diamond: Payer Rectangle: Sweetener

Represents the platform Paying customers Non-paying group that

owner. Stands at the (Revenue). The main creates value to attract
center coordinating all revenue source fueling others (e.g., TV viewers
transactions. the ecosystem. attract Ads).
TOOL: THE PLATFORM BUSINESS MODEL MAP

Arrows: Represent exchange (Money, Data,

Content, Reputation).
Linchpin: The most critical customer group
(King).
Linchpin characteristics: Strongest network
effects, attracts other parties.
Balance rule: Value received must exceed cost
incurred.
Strategy: Often requires subsidizing the Linchpin
group early on.

20 | Value & Roles

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TOOL: THE PLATFORM BUSINESS MODEL MAP

• Whom do you need to bring on board to make your platform work?

• How will you monetize?

• Who are your most important customers? (These are likely both the
primary payer and the linchpin.)

• Is your business model in balance? Does each party receive

enough value to attract its participation? Does each party
contribute enough value to justify its inclusion?
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TOOL: THE PLATFORM BUSINESS MODEL MAP

• Who are the platform’s key customers?

• What is the role, or value contribution, of each customer type?

• What draws each party to the platform?

• How does the platform monetize?

• What value do you provide if you are a customer of the platform?

• How could you extract or leverage more value from the platform?
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TOOL: THE PLATFORM BUSINESS MODEL MAP

01 02 03 04 05
Draw Nucleus Identify Add Payers Draw Check
Linchpin Connections

Draw the Draw the key Draw paying Use arrows to Ensure value
Platform circle group at the groups specify who balance for all
in the center. top. (Diamonds) exchanges parties.
on the right. what value
with whom.
PRACTICAL DRAWING MAP FOR GRAB/AIRBNB

Requirements

Select 1 Platform: Grab (Food/Car) or Airbnb.

Identify: Who is the Linchpin? Who is the main Payer?

Draw parties: Drivers, Restaurants, Guests, Hosts...

Value arrows: Where does money go? Where does data go?

Time: 30 minutes group discussion and sketching.

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COMPETITION
THE NEW COMPETITIVE LANDSCAPE

Asset Light Scaling Fast Winner Takes All Efficiency

Airbnb owns no Zero marginal Strong network Unlocks value
hotels. Uber cost of effects create from
owns no cars. reproduction defensible underutilized
High margin allows rapid market moats. assets (spare
potential. global reach. rooms, cars).
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COMPETITION

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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COMPETITION
SHIFTING LANDSCAPE: FLUID INDUSTRIES
Industry boundaries are blurring due to digital
ecosystems.
Symmetric Competitors: Offering similar value
with similar models.
Asymmetric Competitors: Different models
solving the same problem.
Tesla Example: Not just a car company, but
an energy utility.
Impact: Define competitors based on Risk: Attacked from "blind spots" (Disruption
"customer needs", not "products". from below).
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COMPETITION
NEW RULES OF COMPETITION

Co-opetition Disintermediation Intermediation

Competing and Removing the New platforms inserting

cooperating middleman. Direct-to- themselves. Facebook
simultaneously. Example: Consumer models (e.g., between news publishers
Samsung supplies Warby Parker). and readers.
screens to Apple.
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COMPETITION
CO-OPETITION: COOPERATING WHILE COMPETING

Definition Classic Example Core Mindset

Strategy of competing Samsung supplies Not a zero-sum game.

and cooperating. OLED screens for Apple Competitors don't have
Cooperate to "grow the iPhone, despite suing to fail for us to succeed.
pie", compete to "divide each other over design
the pie". patents.
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COMPETITION
New platforms inserting themselves
into old value chains.

Ex: Facebook News Feed standing

between Publishers and Readers.

Risk: Loss of control over customer

relationships.

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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COMPETITION
Removing traditional middlemen
to access directly.

Ex: Direct-to-consumer (DTC) brands

like Dollar Shave Club, Warby
Parker.

Benefits: Increased margins, data

ownership.

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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TWO RULES OF POWER IN VALUE TRAINS

SIMPLE VALUE TRAINS WITHOUT COMPETITORS

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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The shifting landscape of competition

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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TWO RULES OF POWER IN VALUE TRAINS

Concept: Analyzing power leverage between
partners in the supply chain.

Rule 1: Power belongs to the creator of

Unique Value.
Rule 2: Power shifts to the ends (Original
Creator & Final Distribution Gate).
Example: In publishing, famous authors and
Amazon have more power than Publishers.

Goal: Avoid becoming a basic Commodity.

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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TWO RULES OF POWER IN VALUE TRAINS

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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Organizational Challenges of Competition

Shifting Roles Warfare Openness
Midstream Mentality

Source: The Digital Transformation Playbook: Rethink Your Business for the Digital Age, David L. Rogers
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CHANNEL CONFLICT & ROLE SHIFTING

Problem: New channels (Digital) can "cannibalize"
old channels (Dealers).
Example: Insurance companies selling online
upset traditional agents.
Solution 1: Clear market or product segmentation
for each channel.

Solution 2: Turn dealers into support partners

(Ethan Allen uses stores to fulfill online orders).

Requirement: Requires leadership courage to

overcome organizational inertia.
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FROM "WARFARE MINDSET" TO

"ECOSYSTEM"
Old Mindset: Business is a battlefield, must
destroy competitors (Zero-sum).

New Reality: Success depends on the power of

the partner network.

PayPal Lesson: Peter Thiel merged with rival Elon

Musk to survive the dot-com bubble.

Openness: Accept losing some control in

exchange for speed and scale (e.g., Apple App
Store).
Culture: Need to nurture trust instead of paranoia.
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THE NEXT FRONTIER: AI AS PLATFORM

Generative AI is the newest major platform shift
(2024-2025).
Ecosystem: Foundation models (GPT-4) as
the OS.
Disintermediation: AI agents bypassing
traditional search/websites.

Opportunity: Building specialized applications

on top of LLMs.

Data becomes the critical moat for new

platforms.
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PRATICE