Question

4)
a) Describe value creation on platforms. How does such value creation differ from value creation in traditional organisations?
b) Use a platform of your own choice to illustrate how value creation occurs on digital platforms.

Answer 1

a) The platform is business based on the enabling of value-creating interactions amongst the consumers and the third-party producers. The interactions occurs within the framework of the rules set by platform, it consists the objectives of enabling value creation through facilitating exchange of products and services for a form of currency.
The most important difference between the platforms and the traditional organizations is that the platforms are multisided. The platforms mostly cater to the multiple user groups and they create value by bringing the people and business together and enable them to exchange the value. Its different from the traditional businesses because the traditional organizations cater to one basic group of customer for each product.
b) Value creation is extremely relevant foe the owners of digital service platforms. The owners have goals of increasing their service base and sustaining the service offerers and the key element for completion of these goals is value creation. Netflix, one of the famous digital platforms at this time is the most important example of value creation. It aims at increasing the service base, i.e., providing more quality services to the customers and providing them quality experience and best content for their entertainment and sustain these offered services too. Value creation helps the digital platform in achieving these goals.