This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
This product (Multisided Platform [MSP] Strategy) is a 34-slide PPT PowerPoint presentation slide deck (PPTX), which you can download immediately upon purchase.
Enabled by new capabilities in the Digital Age, many organizations are trying to shift from a Products to Platform business model. The drive behind such a shift can also be attributed to the huge success of platform companies—e.g., Amazon, Google, and Apple. These organizations started out as a retailer, search engine, and computer manufacturer, respectively, but later transformed into platform models.
These platforms are referred to as Multisided Platforms (MSPs). MSPs are technologies, products, or services that enable direct interactions between 2 or more customer or participant groups—and include some of the most successful companies in recent decades.
In crafting an MSP Strategy, there 4 critical strategic decisions to evaluate:
1. Number of Sides
2. Platform Design
3. Pricing Structure
4. Governance
This framework discusses these strategic decision areas in depth. Additional topics discussed include Cross-side Network Effects, Chicken-and-the-Egg Problem, Economies of Scale, Switching Costs, among other topics.
This deck also includes slide templates for you to utilize in your own business presentations.
This presentation provides a comprehensive exploration of the critical strategic decisions necessary for developing a successful Multisided Platform (MSP). The framework delves into the nuances of determining the number of sides, designing the platform, structuring pricing, and establishing governance. Each section is meticulously detailed to ensure that you can make informed, strategic choices that align with your business objectives.
The PPT also addresses common challenges MSPs face, such as the chicken-and-egg problem, cross-side network effects, and economies of scale. By understanding these barriers and leveraging the included slide templates, you will be well-equipped to navigate the complexities of building and managing a robust MSP. This resource is indispensable for executives seeking to transition to or optimize a platform business model.
This PPT slide presents a comparative analysis of pricing structures across various types of multisided platforms (MSPs). It categorizes these platforms into 2 sides: the loss-leader side and the profit-making side. The left column lists different types of MSPs, including advertising-supported media, e-commerce platforms like Alibaba and eBay, payment systems, video game consoles, operating systems, and ticketing services.
On the loss-leader side, the focus is on users and buyers, indicating that these groups often receive services at a lower cost or even for free. This strategy is common in platforms that aim to build a large user base quickly. For instance, advertising-supported media typically provides free access to users while monetizing through advertisers. Similarly, payment systems attract users by offering low fees, which can lead to higher transaction volumes.
The profit-making side highlights the entities that generate revenue from these platforms. Advertisers, sellers, and merchants are identified as key players who pay to access the user base. Game developers and application developers also fall into this category, suggesting they leverage the platform's user engagement to drive sales.
The note at the bottom emphasizes that users are not always on the loss-leader side, hinting at the complexity of pricing strategies in MSPs. This nuanced understanding of pricing structures can help potential customers grasp how different platforms balance user acquisition with revenue generation, ultimately informing their strategic decisions regarding partnerships or investments in these platforms.
This PPT slide provides a comparative analysis of Multisided Platforms (MSPs) against Product Platforms and Resellers, highlighting key characteristics that differentiate these business models. It begins by outlining 2 essential traits of MSPs: first, that each participant group, referred to as "sides," must be meaningful customers of the MSP; second, that the MSP facilitates direct interactions among these sides.
In the left section, the Product Platform is depicted. It illustrates a transaction flow where Side A sells essential inputs to Side B, who then sells the final product. However, it notes a critical flaw: the end consumer is not directly engaged as a customer of the platform, violating the first MSP characteristic.
The central section focuses on the Multisided Platform, emphasizing that it allows for direct interactions between the sides. Both sides are shown to have affiliations with the MSP, which is crucial for its operational integrity. This model effectively meets both MSP characteristics, positioning it as a more integrated and interactive business model.
On the right, the Reseller model is presented. Similar to the Product Platform, it involves Side A and Side B in the sale of goods or services. However, it fails to meet the second MSP characteristic, as there is no direct interaction facilitated by the Reseller between the sides.
The slide concludes by asserting that MSPs, due to their intermediary role, can wield significant influence within their industries. This analysis is vital for understanding how MSPs operate differently from other models, providing insights for potential customers considering strategic decisions in platform development.
This PPT slide provides an overview of Multisided Platforms (MSPs), emphasizing their role in facilitating interactions among multiple participant groups, referred to as "sides." It begins by defining MSPs as technologies, products, or services that enable direct engagement between 2 or more customer segments. The slide lists notable examples of successful MSPs, including online marketplaces like eBay and Amazon, social networks such as Facebook and Twitter, gaming consoles like PlayStation, and various merchant services.
Central to the slide is a visual representation of 4 critical strategic decisions necessary for crafting an effective MSP strategy. These decisions are categorized into 4 key areas:
1. Number of Sides: This aspect focuses on determining how many distinct participant groups will interact on the platform. The right balance is crucial for maximizing value creation.
2. Platform Design: This involves the structural and functional aspects of the platform, ensuring it meets the needs of all sides effectively.
3. Pricing Structure: This decision pertains to how the platform will monetize its services across different user groups, which can significantly impact user engagement and retention.
4. Governance: This area addresses the rules and policies that will govern interactions on the platform, ensuring a fair and efficient ecosystem.
The slide concludes with a statement highlighting the complexity of building and managing a successful MSP, stressing that strategic decisions around these 4 areas are vital for platform success. This insight positions the reader to appreciate the nuanced considerations necessary for effective MSP strategy formulation.
This PPT slide outlines the transformation from traditional products to platform-based models, emphasizing the importance of understanding market conditions, catalysts, and challenges. It is structured into 3 main sections: Conditions, Catalysts, and Challenges, each addressing critical aspects of this transition.
The "Conditions" section focuses on the environments where this transformation occurs. It poses the question, "Where is it playing out?" and highlights examples from various industries, such as home appliances, automotive manufacturing, and furniture. The slide suggests that some sectors are more vulnerable to change than others, indicating a spectrum of susceptibility to market dynamics.
Next, the "Catalysts" segment addresses the timing of these changes. It asks, "When?" and identifies catalysts as the driving forces that precipitate the shift toward platform models. Understanding these catalysts is crucial for companies to anticipate and adapt to changes in their operational landscape.
The "Challenges" section poses the question, "Why is it difficult to respond?" This highlights the obstacles organizations face in adapting to new market realities. It suggests that these challenges can hinder a company's ability to effectively respond to the catalysts identified earlier.
Overall, the slide serves as a framework for companies to assess their readiness for transformation. It underscores the need for a nuanced understanding of the interplay between market conditions, the timing of changes, and the challenges that may arise. This insight is essential for executives looking to navigate the complexities of transitioning to a platform-based approach.
This PPT slide outlines 5 key trade-offs and challenges associated with the decision on the number of sides in a multisided platform (MSP). Each point highlights a critical aspect that decision-makers must consider.
The first trade-off is "Increased Complexity." As the number of sides increases, the complexity of managing interactions and relationships also grows. This complexity can lead to operational inefficiencies and difficulties in coordination.
Next is "Economic Dependency." The slide emphasizes that the business model's viability hinges on the successful functioning of all sides. If one side fails or underperforms, it can jeopardize the entire platform's economic health, making it crucial to ensure all sides are interdependent yet capable of sustaining themselves.
The third point addresses "Conflict of Interests." With multiple sides involved, conflicts can arise, complicating governance. The slide suggests that these conflicts may become more pronounced and harder to manage as the number of stakeholders increases.
The "Lowest Common Denominator Issue" is another challenge. It indicates that introducing innovative features may be stifled by the need to cater to all sides. This can hinder the platform's ability to evolve and adapt to market changes.
Lastly, the "Chicken-and-the-Egg Problem" is reiterated as a significant concern. The slide notes that with more sides, this problem becomes even more complex, as attracting one side often depends on the presence of others.
Overall, the slide serves as a reminder that while increasing the number of sides can offer benefits, it also introduces significant challenges that require careful consideration.
This PPT slide focuses on the strategic decisions involved in Multisided Platform (MSP) design, particularly regarding core features. It poses a critical question: "What core features should we include?" This question underscores the importance of making informed choices about the functionalities that will serve various stakeholders effectively.
The text outlines that design decisions can sometimes be straightforward, relying on a simple cost-benefit analysis. In these cases, the evaluation hinges on whether the value generated for multiple sides of the platform justifies the costs associated with developing or acquiring a feature. However, it also highlights that MSP design can be significantly more complex. The most challenging decisions often involve features that may conflict with the interests of different sides of the platform. This creates a scenario where certain features may benefit one group while potentially harming another.
The slide emphasizes the necessity of understanding these strategic trade-offs. It suggests that some design choices may require sacrificing short-term revenue to enhance the overall utility for participants who might be adversely affected by new features. This insight is crucial for executives as it points to the delicate balance needed in platform design—where immediate financial impacts must be weighed against long-term value creation for all stakeholders involved.
Overall, the content serves as a reminder of the intricacies of MSP design, urging decision-makers to consider both the immediate and broader implications of their feature choices. Poor design decisions can have significant repercussions, potentially jeopardizing the platform's success.
This PPT slide outlines 3 critical trade-offs and challenges related to governance in a multisided platform (MSP) context. The first point, "Quantity vs. Quality," emphasizes the delicate balance between governance rules and participant engagement. Looser rules can attract more participants, enhancing quantity, while stricter rules may ensure higher quality, but limit the number of participants. The slide notes that the effectiveness of cross-side network effects hinges on both the quantity and quality of participants. It suggests that decision-makers must weigh the operational and technological costs of implementing tighter governance against the potential benefits of improved quality.
The second point addresses "Lemons Market Failure" (LMF), which highlights the necessity for quality assurance and transparency within the platform. LMF occurs when an influx of low-quality suppliers drives out high-quality ones, ultimately alienating customers. This phenomenon underscores the importance of establishing governance mechanisms that maintain a healthy balance of supplier quality to sustain customer trust and engagement.
The final point, "Too Much Competition," warns that excessive participation on one side of the platform can lead to an overabundance of competitors. This situation may discourage participants from investing in innovation or developing capital-intensive offerings, as the competitive environment becomes too saturated. The slide concludes with a cautionary note that poor governance can lead to detrimental market failures, emphasizing the need for thoughtful governance strategies to mitigate these risks. Overall, the insights presented are crucial for executives considering the governance frameworks necessary for successful MSP operations.
This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
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