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  • Harvard Business Review

Finding the Platform in Your Product: Four Strategies That Can Reveal Hidden Value

By: Andrei Hagiu and Elizabeth J. Altman
  • Format:Print
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Abstract

Five of the 10 most valuable companies in the world today—Apple, Alphabet, Amazon, Facebook, and Microsoft—derive much of their worth from their multisided platforms (MSPs), which facilitate interactions or transactions between parties. Many MSPs are more valuable than companies in the same industries that provide only products or services: For instance, Airbnb is now worth more than Marriott, the world’s largest hotel chain. However, companies that weren’t born as platform businesses rarely realize that they can—at least partially—turn their offerings into one, say the authors. And even if they do realize it, they often wander in the dark searching for a strategy to achieve this transformation. In this article, Hagiu and Altman provide a framework for doing so. They lay out four specific ways in which products and services can be turned into platforms and examine the strategic advantages and pitfalls of each: (1) opening the door to third parties, (2) connecting customers, (3) connecting products to connect customers, and (4) becoming a supplier to a multisided platform. These ideas can be used by physical as well as online businesses.

Keywords

Multi-Sided Platforms; Competitive Strategy; Value Creation

Citation

Hagiu, Andrei, and Elizabeth J. Altman. "Finding the Platform in Your Product: Four Strategies That Can Reveal Hidden Value." Harvard Business Review 95, no. 4 (July–August 2017): 94–100.
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More from the Authors

    • November 2018
    • Journal of Management Studies

    Disruptive Innovation: An Intellectual History and Directions for Future Research

    By: Clayton M. Christensen, Rory McDonald, Elizabeth J. Altman and Jonathan E. Palmer
    • 2017
    • Faculty Research

    Platforms, Open/User Innovation, and Ecosystems: A Strategic Leadership Perspective

    By: Elizabeth J. Altman and Michael Tushman
    • 2019
    • Faculty Research

    Network Effects

    By: Andrei Hagiu and David B. Yoffie
More from the Authors
  • Disruptive Innovation: An Intellectual History and Directions for Future Research By: Clayton M. Christensen, Rory McDonald, Elizabeth J. Altman and Jonathan E. Palmer
  • Platforms, Open/User Innovation, and Ecosystems: A Strategic Leadership Perspective By: Elizabeth J. Altman and Michael Tushman
  • Network Effects By: Andrei Hagiu and David B. Yoffie
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