A systemic logic for platform business models

Abstract

Purpose

The purpose of this paper is to introduce a new business model logic, highlighting value processes in and properties of platform business models to inform business model thinking from a systemic and dynamic perspective. It challenges the idea of firms managing, influencing and controlling entire activity systems.

Design/methodology/approach

The study traces the evolution of different approaches to business models and assesses theories that explain value cocreation and systemic value capture to develop a new business model logic.

Findings

Business model thinking has evolved away from Porter’s value chain to a new logic based on open networks and platforms. This study develops a framework for understanding platform business models from a systemic perspective. Derived from service-dominant logic, this new business model logic responds to phenomena in contemporary business environments characterized by increasing connectivity and sociality among actors.

Research limitations/implications

The framework, developed from an extensive body of business model literature, has yet to be subjected to empirical investigation. Future research may involve the exploration of business model design processes and business model innovation from a systemic perspective.

Practical implications

Managers who aim to design their business models based on the logic of platform businesses require an understanding of their organization’s collaboration potential, technological interfaces and potential to leverage network relationships. This research guides start-ups and incumbents to evaluate their platform potential.

Originality/value

This study systematically emancipates the business model logic from a firm-centered, inside-out perspective, focuses on network relationships beyond the customer–firm dyad, explains value processes beyond organizational borders and rethinks value capture from a systemic perspective.

Citation

Fehrer, J.A., Woratschek, H. and Brodie, R.J. (2018), "A systemic logic for platform business models", Journal of Service Management, Vol. 29 No. 4, pp. 546-568. https://doi.org/10.1108/JOSM-02-2017-0036