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• Article | Marketing Science | July–August 2020

  Price Bargaining and Competition in Online Platforms: An Empirical Analysis of the Daily Deal Market

  Lingling Zhang and Doug J. Chung

  The prevalence of online platforms opens new doors to traditional businesses for customer reach and revenue growth. This research investigates platform choice in a setting where prices are determined by negotiations between platforms and businesses. We compile a unique and comprehensive dataset from the U.S. daily deal market, where merchants offer deals to generate revenues and attract new customers. We specify and estimate a two-stage supply-side model in which platforms and merchants bargain on the wholesale price of deals. Based on Nash bargaining solutions, our model generates insights into how bargaining and competition jointly determine the price and firm profits. Our results show that there is systematic variation in bargaining power between platforms and merchants with different characteristics. By working with a bigger platform, merchants enjoy a larger customer base, but they are subject to lower margins due to less bargaining power during negotiations. Our counterfactual results quantify the value of platforms for merchants and show that merchants with lower bargaining power benefit more by working with a smaller platform. Regarding the impact of price negotiations on platform competition, we estimate that roughly 11% of the deals on a smaller platform are attributable to the platform’s lower level of revenue sharing.

  Keywords: business-to-business marketing; platform competition; Two-Sided Markets; price bargaining; daily deals; structural model; Two-Sided Platforms; Competition; Price; Negotiation;

  Citation:

  Zhang, Lingling, and Doug J. Chung. "Price Bargaining and Competition in Online Platforms: An Empirical Analysis of the Daily Deal Market." Marketing Science 39, no. 4 (July–August 2020): 687–706.  View Details

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• Technical Note | HBS Case Collection | July 2020

  Digital Natives Growing Without a Sales Force

  Das Narayandas, Michael Norris and Amram Migdal

  This brief case describes the rise of so-called digital natives (also called born-in-digital) in the 2000s and 2010s that successfully grew without a sales force. The case highlights the emergence of business-to-business Internet and cloud-based companies and their decisions regarding sales strategy based on different customer bases. The case discusses the firms Atlassian, Basecamp, and Slack.

  Keywords: Business Growth and Maturation; Customers; Customer Focus and Relationships; Customer Relationship Management; Innovation and Invention; Disruptive Innovation; Innovation Strategy; Technological Innovation; Marketing; Marketing Channels; Marketing Strategy; Product Marketing; Sales; Technology; Information Technology; Internet; Online Technology; Software; Technology Adoption; Information Technology Industry; Australia; North and Central America; United States; Illinois; Chicago; California; San Francisco;

  Citation:

  Narayandas, Das, Michael Norris, and Amram Migdal. "Digital Natives Growing Without a Sales Force." Harvard Business School Technical Note 521-019, July 2020.  View Details

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• Article | Hafo shang ye ping lun [Harvard Business Review, Chinese edition] | July 2020

  Yiqing xia zhongguo qiye de duice xuanze [Lessons from Chinese Companies' Response to COVID-19]

  Das Narayandas, Vinay Hebar and Liangliang Li

  China was weeks ahead of the rest of the world in dealing with the pandemic and its fallout. To understand what's next, the authors conducted a series of 20 in-depth, in-person interviews, as well as a large-scale survey of more than 350 senior executives to ascertain how the Chinese corporate world has adapted, innovated, and survived—and even thrived—in these extremely uncertain and trying times. They identified 11 lessons for leaders in the rest of the world.

  Keywords: Management; Innovation and Management; Health Pandemics; Organizational Change and Adaptation; Asia; China;

  Citation:

  Narayandas, Das, Vinay Hebar, and Liangliang Li. "Yiqing xia zhongguo qiye de duice xuanze [Lessons from Chinese Companies' Response to COVID-19]." Hafo shang ye ping lun [Harvard Business Review, Chinese edition] (July 2020): 118–125. (Also appeared online, in English, at Harvard Business Review, June 5, 2020.)  View Details

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