**2. Platform trends and prospects**

Platforms command a total market share value of \$4.3 trillion and an employment base of at least 1.3 million direct employees and millions of other indirectly employed; platforms have become an important economic force [11]. In the third quarter of 2016, the five largest companies in the world were platform-empowered: Apple, Google, Microsoft, Amazon, and Facebook [11].

Enterprises that utilize the power of platform business models have grown intensely in size and scale over the past decade. No longer the solitary domain of social media, travel, books, or music, platform business models have covered transportation, banking, and even health care and energy [11]. The innate reason that platforms have lately captured so many business leaders' imaginations is that they enable the "pull-based" approaches which have long been seen as the future of serving customers profitably [12].

business model enabled by digital technologies. In many cases, platforms are able to bring to bear the power of communities to become real competitors to established companies [1].

The concept of platform has moved through different phases and each had its specific orientation. Product development researchers first used the term "platform" to describe project that generated a new family or a cluster of products for a particular firm [2]. The concept of "platform product" was later introduced to describe new products that address the need of a core consumer group [3]. This work was followed by research on "platform investments" [4], "platform technology" [5], "platform thinking" [6], along with rich field studies [7] and managerial advice on platform-oriented product planning [8, 9]. In the second wave, technology strategists identified platforms as valuable points of control in an industry. Industrial economists adopted the concept of a "platform" to characterize products, services, firms, or institutions that mediate transactions between two or more groups of agents [10]. An important property of platform systems is that they are evolvable, in the sense that they can adapt

The platform strategy is a growing area that has provided the business firms with multiple opportunities for generating value. Whatever a platform does, it only comes down to two main issues which are relationship building and solution delivery (products and services). Within this line is where a range of other things comes to feature. There are several types of platforms but a general category falls within the digital and non-digital platforms. Within this general classification, there are also specific forms of platforms. What drives the classification of these platforms is their primary functions. The study on platform strategies narrowly focuses on digital platforms; however, what defines platform is not just the technology behind but the level of interaction which is provided. With this thinking in mind, even simple relations can be viewed as platforms. The nondigital platforms have existed in the past but what has now changed is harnessing the potential for value creation. Today, the entire networking market is built in terms of relationships. The relationship can be optimized to generate value through combining the multiple individual relationships. Platforms can be designed to provide social interaction (e.g., Facebook and Instagram) or can be created for providing a specific product or a service (e.g., the Air bnb and Uber). Whatever the primary motive for the creation of a platform, its ability to drive user traffic can be transformed into a value creation potential. A major concern for managers is how to develop sustainable business models with platforms. This chapter thus provides a comprehensive overview of how marketers can strategically utilize platforms. The chapter does not intend to

Platforms command a total market share value of \$4.3 trillion and an employment base of at least 1.3 million direct employees and millions of other indirectly employed; platforms have become an important economic force [11]. In the third quarter of 2016, the five largest companies in the world were platform-empowered: Apple, Google, Microsoft, Amazon, and Facebook [11].

Enterprises that utilize the power of platform business models have grown intensely in size and scale over the past decade. No longer the solitary domain of social media, travel, books,

to unanticipated changes in the external environment [2].

22 Marketing

address the designing and development of platforms.

**2. Platform trends and prospects**

Many firms are employing noticeably different tactics depending on whether they see a platform as a way to improve performance (by focusing on what they do best), grow their footprint (by leveraging capabilities that in the past they would have had to own), innovate (drawing on that vast majority of smart people who aren't strictly in their employ), or capture more value [13]. At the same time, platform companies have been disruptive. Online platforms have upended several brick and mortar chain and are making profound penetration into other industries from television to transportation [11]. It is becoming increasingly possible and therefore crucial for sellers to move to pull-based approaches. These reorient operations such that nothing happens until actual demand signals are received from real buyers [13].

The rise of platforms is propagating strong reaction. A growing number of traditional firms are beginning to explore business models through a variety of strategies. Some attempt to grow them organically while others are using acquisitions to speed growth [11]. Smart managers will refocus their platform strategies again on the deliberate pursuit of the learning advantages that platform participation exclusively affords [11]. There is thus money to be made in providing layers of capabilities and standards that other players in that market can tap into and use to interact more efficiently [13].
