Platform business model theoretical framework

Micromobility sharing-schemes present in the city of Copenhagen (Donkey Republic, VOI, Tier etc.) are all operating in the same industry, the transportation one, where any business active in, from airplanes airlines to cars’ renting companies, basically strives to provide the same optimal result: make people move.

Teece (2010) alone, though representing the core essence of a business model structure, would be somehow too generic and thus reductive to highlight the different micromobility sharing-schemes’ components.

Conscious of this limit, Täusher and Laudien (2018) decided to review literature of business models, platforms more in general and marketplaces specifically. The result of their efforts is the framework shown in figure 3, inclusive of all the most important elements composing a transaction platform business model

Thus, the business model configuration with three “macro” dimensions of Teece (2010), is further broken down into more accurate components and adapted for the analysis of transaction platforms.

The framework is organized as following: The first four key resources and activities form the value creation, the subsequent six are part of the value delivery dimension (value proposition, product/service, target customers), and the final four represent the value capture dimension (revenue and pricing model).

Figure 3. Key business model attributes of Transaction Platform, (Täusher and Laudien, 2018)

We decided to follow the same framework to analyze in detail the niche-innovations (Micromobility sharing-schemes) present in Copenhagen mobility.

As a matter of fact, in their study, Täusher and Laudien (2018) take into consideration more than 100 different transaction platforms, including companies active in different industries from each other with inevitably different business models.

This research is one of the first to empirically classify marketplaces business models across industry borders, ranging from physical products (e.g. used household products), digital products (e.g. digital music), online services (e.g. online tutoring) to offline ones (e.g.

transportation service).

The final purpose of Täusher and Laudien (2018) study was to empirically and conceptually categorize transaction platform business models under a grounded taxonomy. “On-demand offline services”, one of the six taxonomy clusters identified by the two authors, encloses the attributes of our protagonists micromobility sharing platforms.

Thus, the decision to we make use of the identical theoretical framework in Figure 3 to design the MMSS business model and contribute to the findings of the present study. This tool was, indeed, intentionally developed by Täusher and Laudien (2018) for business model elements classification under the transaction platforms boundaries.

Now, then, let’s describe the different key attributes of a transaction platform business model.

Value Creation Dimension

The firm’s architecture of resources and mechanisms necessary to elaborate the value proposition, is the value creation dimension. Key processes, refer to those processes that enable the delivery of the proposition. According to Johnson et al. (2008), examples of key processes are: design, product development, sourcing, manufacturing, marketing, margin requirements for investment, approach to customers/partners and channels etc.

Key resources, on the contrary, refer to those resources necessary to deliver the proposition, such as people, technology, products, equipment, information, channels, partnership and alliances, brand etc. (Johnson et al., 2008).

The framework starts by differentiating between the two most common and principal type of platform technology, such as purely web-based or mobile app.

On one side, sometimes these two could be more part of the value delivery dimension, as channels for the value proposition expression. On the other, web and app platforms are technological assets and, then, key resources of a transaction platform belonging to the value creation processes.

Key activities range from data services (analysis and visualization of transaction data for sellers), to content creation/curation (e.g. co-designing a seller’s profile) and the attempt of building a community of users around a specific service/product.

Before moving forward, we want to linger for a second here, as whoever else using the same framework might find himself questioning the same point.

Although might sound a bit imprecise to reduce all marketplaces activities down to these mere three ones, we want to remind that Täusher and Laudien (2018) framework is an attempt to

“squeeze” all different kinds of transaction platforms attributes into a single theoretical tool, which is still an unexplored field of research. But, it’s exactly thanks to its “broad-precision”

that this framework meets our tailored needs, better than any other business model template so far developed (e.g. the Canvas one). It goes without saying that, it is our hope to make further contributions to the topic and drive possible future scenarios of analysis and further research.

Price discovery practices mostly depends on whoever is responsible for fixing the pricing mechanism. It could either be the demand side or the supply one, however, as in most of the cases happens, is the same platform provider to arrange it. It’s important to distinguish between supply and platform provider, because they don’t necessarily represent the same actor.

Think about Airbnb (platform provider), where is the property owner (the supply) to set the accommodation price. Finally, transaction platform can have a competitive pricing mechanism, such as Ebay’s auction system for example.

The reviewing system is a fundamental function for marketplaces’ trustworthy (Pavlou &

Dimoka, 2006). Hence, the framework distinguishes whether the platform allows participants to mutually review each other, provides a review based on standardized metrics, or any reviewing system is actually in place.

Value Delivery Dimension

The value delivery dimension essentially relates to the business value proposition, which is how the business model fulfils a particular customer need (Johnson, 2008).

Examples of different propositions of bike sharing services are a ‘last-mile’ solution, tourist mobility or local urban transport. The framework distinguishes between three different types of perceived value by the platform user:

● A mere utilitarian one according to price, cost, or efficiency advantages offered.

● Emotional value connected to superior user experience or associated with an image/philosophy for using the marketplace.

● Social value through the interaction with other marketplace participants.

Value is delivered differently depending on whether the transaction contents involve a product or a service. As well as, whether the transaction type happen online (digital) or offline. What’s very interesting is the combination of the two dimensions, as it determines whether the platform

offers physical products (e.g. second-hand clothes), digital products (e.g. streaming movies), online services (e.g. language courses) or offline services (e.g. transportation).

Important is also understanding whether the marketplace in analysis provides vertical or horizontal market integration. Horizontal integration is the acquisition of a business operating at the same level of the value chain in a similar or different industry. On the contrary, vertical integration refers to firms’ expansion into upstream or downstream activities, which are at different stages of the production line (Dai & Kauffman, 2001).

Finally, the value delivery dimension is completed by what is the geographic expansion (Schief, Pussep, & Buxmann, 2013) and the type of user segments that the marketplace primarily connects as participants (Consumer-to-consumer; to-Consumer, Business-to-Business).

Value Capture Dimension

Last but not least, the value capture dimension or profit formula defines how the company generates financial value for itself (Johnson et al., 2008).

Transaction platforms transform the value delivered to customers into revenue and profits through commission/subscription/advertising model or service sales (Schlie, Rheinboldt, &

Waesche, 2011). Companies can choose the single revenue stream they want or the combination of more of these according to their needs, as this is what the term “formula”

specifically stands for.

Pricing mechanism is characterized by fixed, market or differentiated pricing.

Pricing discrimination refers to pricing mechanisms between different user groups according to customer feature-based (such as adults pay more than children), location (e.g. suburbs cheaper than city center) or volume dependant (e.g. the more quantity you buy the cheaper) (Osterwalder, 2004).

The transaction platform business model is further defined by the decision to have as revenue source: supply-side participants, demand-side participants, or a third party (Täuscher & Chafac, 2016). The option ‘none’ is included in the case of start-ups, which haven’t yet started to monetize its services.

4.1.3 PBM application to the analysis of micromobility niche-innovations