Competition
Session 4
Agenda
1. Customer network
2. Customer network behavior
Building a Platform, Not Just a Product
Building a platform instead of just a product means creating an
ecosystem where multiple users, businesses, or services interact, rather
than a standalone solution.
Ex: Grab, Lazada
Product Platform
Solve a specific problem Facilitates interactions between multiple parties
Closed system Open ecosystem
Value comes from features Value comes from network effects
Linear growth Exponential growth potential
Spotify YouTube (enables creators, advertisers, and viewers to interact)
MS Office (doc, ppt, xls…) MS Windows (hosts applications, users and developers)
Why Build a Platform & What Challenges
Why build a platform? What are the challenges?
● Harder to launch - requires both supply
● Scalability
and demand
● Network Effects
● Governance and moderation complexities
● Ecosystem Control ● Monetisation models need careful planning
Real-case studies of companies that are successfully
transitioning from a Product to a Platform
Amazon Product Phase 1994 - Early 2000s
- Started as an online bookstore, then expanded to selling
other products
- Operated as a traditional e-commerce business
Amazon Platform Transformation 2000 Amazon Market Place
- Opened its platform for 3rd party sellers, increasing product
variety and reducing inventory risk
2006 Amazon Web Services (AWS)
- Monetised its cloud infrastructure, allowing other business
to build on its tech platform
Amazon became an ecosystem where 3rd party sellers,
developers, and customers interact, leading to network
effects and exponential growth
Real-case studies of companies that are successfully
transitioning from a Product to a Platform
Apple Product Phase 1976 - 1990s
- Focused on selling hardware Mac, iPod, iPhone
Apple Platform Transformation 1990 - 2000 App Store, Apple Pay, Apple Music, iCloud
- Allowed 3rd party developers to create and distribute apps
on IOS
- Expanded the ecosystem to integrate services, developers
and users
Apple’s platform strategy locked users into an ecosystem
where devices, apps, and services interact seamlessly
Real-case studies of companies that are successfully
transitioning from a Product to a Platform
Microsoft Product Phase 1975 - 2000s
- Sold boxed software like Windows and Office as standalone
products
Microsoft Platform Transformation 2010 Azure, MS 365
- Became a cloud platform that hosts apps, AI and services
for other businesses
- MS 365 subscription model, turned office into a
cloud-based platform integrating productivity apps, AI, and
collaboration tools
2016 - 2018 Power BI, Github Acquisition
- Data Analytics platform like Power BI Service
- Strengthened developer engagement & open-surce
integration
Microsoft evolved from a software provider to a
multi-sided platform supporting businesses, developers,
and end users
Platform Business Models
● How do they work?
● What differentiates them?
● How do they compete?
A platform is a business that creates
value by facilitating direct interaction
between 2 or more distinct types of
customers.
How Platform Business Models Work?
A platform business model connects multiple groups (e.g., consumers,
producers, developers) and enables interaction between them. Unlike traditional
businesses that sell products or services directly, platforms facilitate exchanges
and create value through network effects.
Key components of a platform business model:
1. Value creation: it must coordinate problems between different user groups.
Grab connects drivers (supply) with riders (demand)
2. Network Effects: the more users join, the more valuable the platform
becomes. More sellers on Amazon attract more buyers, making the platform
more useful.
3. Governance & Rules: it must set rules, incentives and policies for participants
4. Monetisation Model: it makes money through fees, ads, subscriptions or
data monetisation (Apple takes 30% commission on App Store sales
What differentiate traditional vs platform
business model?
Aspect Traditional Business Model Platform Business Model
Value Creation Produces & sells products and Facilitate interactions between users
services directly (buyers, sellers, developers, etc.)
Ownership Owns inventory, infrastructure Enables 3rd party to provide goods
or workforce and services
Growth Model Linear (sacles by increasing Exponential (scales via network effects)
production and supply)
Revenue Model Direct sales, Commissions, transaction fees,
subscriptions, licensing ads, subscriptions, data
monetisation
Customer Role Passive consumer Active participant (user-generated
content, transactions, etc.)
Scalability Limited by operational capacity Highly scalable with low margining costs
Example Ford: manufactures & sells cars Grab: connects drivers & riders
without owning cars
How does the platform business model compete?
Network Effects (Winners-Takes- Direct Network Effects: More users = more value
Most Strategy) Indirect Network Effects: More sellers attract more buyers
Ecosystem Lock-In Platforms make it hard for users to leave by embedding services deeply.
(Switching Costs & Integration) Multi-product integration: Apple links iOS, App Store, iCloud & Apple Pay
User Investment: Apple Music creates personalised playlist and others, making
switching costly
Monetisation & Pricing Strategy Platforms use freemium, subsidies, and dynamic pricing to grow. Freemium:
Free tier attracts users; premium features generate revenue Subsidising
one side: Grab paid bonuses to drivers to ensure supply Revenue
diversification: Google monetises search with ads, while Amazon
monetises with Prime, AWS, and Marketplace fees
AI & Personalisation Platforms leverage user data to optimise engagement, recommendation and ads
Multi-Homing & Platform Differentiation Multi-homing: Users can be on multiple platforms
Exclusive content or network: Facebook prevents multi-homing with private groups
and messenger
Regulation & Market Entry Barriers First-mover advantage: Google Search dominates due to early AI investments
Regulatory lobbying: Uber fights regulations to expand globally
Competitors / Competition
● Coopetition
● Intermediation
● Disintermediation
● The rise of asymmetric competitors
What is the Competitive Value Train (CVT)
Competitive Value Train is a tool to help firms analyse and assess
competition and leverage between a firm and its business partners, direct
rivals, and asymmetric competitors. This allows companies to strategically
leverage partnerships, counter threats, and expand advantages.
Simple Value Train for Laptop Computers (without
Competitors)
Microsoft Lenovo Laptop
FPT shop
(Windows) (laptops) consumer
Originator Producer Distributor Consumer
Platform Business Model
Competitive Analysis using CVT
fi. Business Partners (Suppliers, Developers, Ecosystem
Players)
Key Question How can we create mutual value while maintaining leverage?
CVT Focus Value Capture & Defense
Leverage Tactics Ecosystem control: Apple dictates App Store policies, ensuring it captures high
margins.
Platform dependency: Amazon forces sellers to use its fulfillment services for Prime
eligibility
2. Direct Rivals (Head-to-Head Competitors in the same market)
Key Question How can we differentiate and weaken our competitor’s CVT?
CVT Focus Value Creation & Defense
Leverage Tactics Network Effects: Tik-Tok’s AI-Driven virality forced YouTube to launch Shorts
Exclusive integrations: Apple’s closed ecosystem (iOS + App Store) prevent easy
switching to Android
Competitive Analysis using CVT
3. Asymmetric Competitors (Firms Competing Indirectly but Disrupting the
Market
Key Question How can we predict & defend against unexpected disruption?
CVT Focus Value Defense & Long-Term Strategy
Leverage Tactics Cross-industry expansion: Apple entered finance (Apple Pay, Apple Card),
competing with banks and credit cards
Regulatory barriers: Uber & Airbnb faced resistance from traditional industries but
lobbied for new policies
Acquisition defense: Faceboook bought instagram & WhatsApp to neutralise social
media threats
Competitor Type How to leverage the relationship Example
Business Partners Strengthen dependencies and control key Apple forcing developers to use its
assets App Store
Direct Rivals Differentiate, build switching costs, expand TikTok forcing YouTube
defensively into short-form content
Asymmetric Competitors Identify threat early, create market barriers Google adapting AI search to
counter OpenAI