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This paper aims to first, identify the external and internal factors that a company needs to analyze when formulating its digital platform strategy. Based on the framework of PESTNPG (political economic social and culture technological population and globalization) and internal analysis a company should analyze both internal and external factors to formulate its digital platform strategy. For companies from emerging markets the institutional-based market created by national or local governments is important for digital platform strategy. Second dynamic capability theory and its linkages to digital platform strategy. The dynamic capabilities view is considered as a primary theoretical lens in the strategy literature to analyze a company’s strategies to achieve sustainable competitive advantages. To carry out a successful digital platform strategy companies need to build strong dynamic capabilities to capture or create opportunities and reconfigure their resources simultaneously. Third the advantages and disadvantages of different digital platform strategies (i.e. an independent digital platform and online–offline integration platform) and the possible consequences and risks of different strategies. It is important to evaluate different types of digital platform strategies that require different capabilities in terms of business structure product structure revenue structure organizational structure and technology architecture. A company needs to link these capabilities to a digital platform strategy to enable the integration (or separation) of online business with offline business. It also increases the accuracy and efficiency of online business. Fourth key points of digital platform strategy implementation. Companies need to identify key profit models for their digital platform to promote business growth and financial returns. It is equally important to increase customer value by leveraging its digital exhibition platform and to learn to use digital technology to foster organizational dematerialization.

Zhejiang Meorient Commerce & Exhibition Inc. (hereinafter referred to as “Meorient”) was a leading company in the exhibition industry in China. The unexpected outbreak of COVID-19 plunged Meorient into a state of emergency that forced it to fight for survival. Further, China had launched a national strategy of Digital China, which created new market opportunities for Meorient. As a result, Meorient gradually developed and launched its digital exhibition services in 2015. Meorient suffered significant losses in 2020 due to COVID-19 and had to formulate a new strategy based on a digital exhibition platform in 2021. Chairman Pan Jianjun had two options. One was a purely digital platform strategy without the original offline exhibition business. The other one was an online and offline integration strategy. Which option was the best way forward for Meorient? Pan had to make a choice. Some of the top management team members believed Meorient should completely transform into a digital platform company and provide comprehensive online digital exhibition services. Over the previous 20 years, Meorient had accumulated a large amount of data from domestic and foreign exhibitors and professional buyers and had gradually developed a digital exhibition platform. It was one of the companies that pioneered digital transformation within China’s exhibition industry. More conservative thinking held that Meorient's strategy should focus more narrowly on the integration of online and offline exhibition businesses. Toward the post-pandemic era, China’s national strategy of “Digital China” accelerated the development of digital infrastructures. During such critical transitional period, Meorient had to choose wisely if it was to sustain its profits or even survive.

The case is aimed at students in undergraduate, MBA, short course executive, EMBA or other executive education programs, especially where digital transformation is featured subject matter.

Teaching notes are available for educators only.

CSS 11: Strategy

1. Understand how the corporate lifecycle could trigger a necessity of making a tough decision to develop new business ventures based on the corporate lifecycle theory; and how changes in the external environment could hasten such a decision.

2. Analyze how a company can leverage its internal organizational structure to share and utilize cross-departmental resources and capabilities to support new venture businesses according to the synergy effect perspective.

3. Undertake a resource-based view analysis to evaluate the external and internal resources needed for corporate new venture development.

4. Identify the best course of action for the decision-maker by comparing, contrasting, applying and evaluating the two different models of corporate new venture development in the e-commerce business: the centralized organizational model and the decentralized organizational model and evaluate the pros and cons associated with each mode in the context of Dahan’s external and internal environments.

Since its inception in 2003, Dahan’s traditional business in SMS (Short Message Services) and data had gained thousands of customers across China and won top rankings in the industry. Despite its achievements, Dahan encountered difficulties when it entered the new e-commerce market, as the domain knowledge about the new business was very different from the domain knowledge in its traditional business. Furthermore, the emerging B2B e-commerce industry was very different from the traditional business in that the former mainly targeted corporate clients and the latter targeted individual customers in the B2C industry. This case examined the critical decisions that Xiaofen Huang, the CEO of Dahan E-Commerce Corporation and Co-Founder of Dahan Tricom Group, had to make and external, especially Internal, resources the Dahan Group needed in developing its new venture.

Specifically, this case explored how Huang would go through the mental process to make the best possible decision to help the company not only to survive, but also thrive in the rapidly-changing and competitive digital environment: it urgently needed to finalize an organizational incubation model to support the further development of its e-commerce and future new venture activities with two options to choose from: the centralized organizational model or the decentralized organizational model. A key challenge facing Huang was to decide which option was best suited to motivate salespeople in different departments to help one another, especially in the new B2B e-commerce business and to grow that new business.

In the case, Dahan’s growth aspirations and its motivation to transform its traditional business into a new e-commerce business were discussed. Second, when external challenges were examined, how Dahan explored the B2B e-commerce business using a trial-and-error learning process was explained. Third, when internal challenges were examined, how Dahan incubated its new B2B e-commerce business and its practices for leveraging and sharing resources/capabilities, as well as cross-departmental and cross-divisional collaboration through a resource-based lens, were illustrated. Last, the most critical learning in the case presented an immediate decision-making dilemma on which organizational incubation models to choose from for further new business development, where students learn to analyze both external and internal factors and consider Dahan’s available resource and founder’s aspiration, available strategic options to derive a best possible decision to suit the stage of the company’s lifecycle and founders’ vision.

This case was designed for use in undergraduate courses on corporate innovation, new venture development, corporate innovation, corporate entrepreneurship, e-commerce and growth.

Teaching notes are available for educators only.

CSS 11: Strategy.