In this article, the authors draw on recent theoretical work to guide executives negotiating the challenges of two-sided networks. As a result, they make many decisions that are wholly inappropriate for the economics of their industries. Their failures are rooted in a common mistake: In creating strategies for two-sided networks, managers typically rely on assumptions and paradigms that apply to products without network effects. Yet most firms still struggle to establish and sustain their platforms. Because of what economists call "network effects," these platform products enjoy increasing returns to scale, which explains their extraordinary impact. The platform product or service incurs costs in serving both groups and can collect revenue from each, although one side is often subsidized.
In two-sided networks, cost and revenue are both to the left and to the right, because the "platform" has a distinct group of users on each side. In the traditional system, value moves from left to right: To the left of the company is cost to the right is revenue. Two-sided networks differ from traditional value chains in a fundamental way. Newspapers,for instance, bring together subscribers and advertisers HMOs link patients to a web of health care providers and vice versa operating systems connect computer users and application developers. The list would also include newspapers, HMOs, and computer operating systems-all of which serve what economists call two-sided markets or networks. Case in point: The most important innovation in financial services since World War II is almost certainly the credit card, which links consumers and merchants. If you listed the blockbuster products and services that have redefined the global business landscape, you'd find that many of them tie together two distinct groups of users in a network. In our findings, initial perceived value of saving benefit, initial recency, and initial monetary value have significant effect to customer loyalty measured by transaction frequency and customer lifetime value. We use multiple regression method with 266 transaction data from customers who have already made at least twice transaction and joined as members for at least 4 months to predict the customer lifetime value and check the significance of its antecedents.
In this paper, we will explore one of the systems of the collaborative consumption, product-service system in term of customer loyalty by using data from, a Start-Up that using this model.
However, up until now the research and empirical study about collaborative consumption practice in a developing country with lower-income consumers compared to developed country is very limited. The economy model has been adapted by rising Start-Ups and enables lower-income consumers to remove the cost barrier by using access-based consumption. Finally, we suggest that mutual adaptation of BMs of platform-associated actors leads to improved diffusion of the platform offer, which also hints at the need for researchers to revisit innovation diffusion and technology adoption theories by acknowledging the importance of the BM of the offer side of technology.Ĭollaborative consumption has been changing how the people consume products in recent years. Furthermore, our study suggests that mobile payment providers need to adapt their role within the ecosystem to scale the platform, and that it will depend on their choice of scope of geographic availability. We studied how mobile payment providers engaged in innovation of their business models, and thus identified three pertaining aspects: rethinking the relationship management with retailers, creating partnerships with other actors in the payment ecosystem to complement and deliver the proposed value, and integrating and using front-end mobile technology. In this study, we take a business model (BM) perspective to understand how mobile payment platform providers go about addressing such a challenge. The power of platform business models has grown as our economies become increasingly digital, but how companies address the challenge of platform growth to achieve a critical mass of users remains unclear.
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