Industry Platforms: Case Studies to Measure Platform Capabilities for US Unicorns
Name
alsadah-yalsadah-sm-sdm-2023-thesis.pdf
Description
Thesis PDF
Size
3.97 MB
Format
Adobe PDF
Checksum (MD5)
996663ed86470eaf2c33d3eff06dc8eb
Author(s)
AlSadah, Yousif Fayez
Advisor(s)
Cusumano, Michael A.
Date Issued
September 2023
Publisher
Massachusetts Institute of Technology
Abstract
Large-sample empirical research by Cusumano et. al. found that US privately-held unicorns with platform capabilities command on average 123% premium over non-platforms. However, measuring the extent to which a company is platform or non-platform based is a difficult problem given the complexities of business organizations and how these activities interact with each other in non-linear ways.
This thesis attempts to address this by proposing a systems thinking, case-based approach to evaluate the key business activities of a firm with potential platform capabilities using the author’s proposed Platform Classification Matrix on five of the largest US privately-held firms: Epic Games, Databricks, Plaid Technologies, Stripe, and Instacart. Each business activity for a firm is classified as platform or nonplatform, and if it is a platform then it is assessed based on its revenue contributions to the firm and three strength metrics: Network effects, strength against multihoming, and new entrant deterrence. This matrix generates a ‘platform strength’ metric and allows identification of the platform activity with the most potential towards a winner take all or most case.
The author further proposes combining this matrix with a system dynamic approach to identify how differing business activities can boost or hinder the leading platform service which allows decision makers to assess whether retaining or subsidizing seemingly low-performing business lines is strategic for their leading platform.
The thesis concludes by advocating for using both methods as well as the generated metrics to perform a holistic analysis when evaluating firms with platform capabilities potential.
MIT Department
System Design and Management Program.
Terms of Use
In Copyright - Educational Use Permitted
Copyright retained by author(s)
Persistent DSpace Link
