Two-sideMarket双边市场.ppt

,STRATEGIES FOR,TWO SIDE MARKETS,G5 group,What is the two-side markets,Challenge 1: Pricing the Platform,Challenge 2: Winner-Take-All Dynamics,Challenge 3: The Threat of Envelopment,Case Analysis,G5 group,What is the Two-Side Markets,G5 group,Development & Definition,One-Side Market,Two-Side Market,Two-sided markets, also called two-sided networks, are economic platforms having two distinct user groups that provide each other with network benefits,Producer,Market,Consumer,Platform,G5 group,Structural Characteristics,It include two effects,Platforms,Side1,Side2,Members of at least one group exhibit a preference regarding the number of users in the other group,Cross-Side Effect,Side1,Side2,Platforms,Each groups members may also have preferences regarding the number of users in their own group,Same-Side Effect,G5 group,Challenge 1:,Pricing the Platform,G5 group,Pricing without taking network effects into account,Traditional pricing logic seeks the biggest revenue rectangle (price quantity) under each demand curve.,G5 group,Pricing with taking the network effects into account,Long as the revenue gained (red box) exceeds the revenue lost (light blue box), a discounting strategy is profitable. The subsidy largely changes network size.,Subsidize the consumer side,G5 group,Pricing with taking the network effects into account,Subsidize the developer side,In this market, consumers care more about access to critical features. The main effect of a subsidy is to change network value.,G5 group,A Question,Which side should be subsidized,G5 group,Factors need to be considered,1, Ability to capture cross-side network effects.,Subsidy Side,Your Platform,Rival Platform,Money Side,USER 1,USER 2,USER B,USER A,Your giveaway will be wasted if your networks subsidy side can transact with a rival platform providers money side.,G5 group,Factors need to be considered,2, User sensitivity to price.,Consumer Demand,Developer Demand,Price,Price,Quantity,Quantity,Old P,New P,Old Q,New Q,d Q1,Old P,New P,Old Q,New Q,d Q2,d Q1,Generally, it makes sense to subsidize the networks more price-sensitive side and to charge the side that increase its demand more strongly in response to the other sides growth.,G5 group,Factors need to be considered,3, User sensitivity to quality.,D1,D0,AC1,AC0,Price,Quality,P0,C0,C1,Q0,Q1,High sensitivity to quality also marks the side you should subsidize. This pricing prescription can be counterintuitive: Rather than charge the side that strongly demands quality, you charge the side that must supply quality.,Developer Strategy,G5 group,Factors need to be considered,4, Output costs.,Price,MC,Quantity,Quantity,D0,D1,Price,Q0,Q1,C0,C1,Qa,Qb,Consumer COST,Developer Demand,P0,P1,Blue box Yellow box, then it will be profit,Pricing decisions are more straightforward when each new subsidy-side user costs the platform provider essentially nothing,G5 group,Factors need to be considered,5, Same-side network effects.,Developer quality A,Developer quality B,Q1b,Q1a,Q2b,Q2a,In most market, sellers would be happy to see fewer direct rivals; the same can be true for buyers when goods are scarce.,In the face of strongly negative same-side network effects, platform providers should consider granting exclusive rights to a single user in each transaction category and extracting high rent for this concession.,6, Users brand value.,All users of two-side networks are not created equal. The participation of “marquee users” can be especially important for attracting participants to the other side of the network.,Challenge 2: Winner-Take-All Dynamics,G5 group,G5 group,Fighting strategy,To Choose,Hold the Market,Share with rivals,G5 group,STEP1: Know the Fighting condition,To Judge,Whether the market is destined to be served by one platform,G5 group,Served by one platform condition,Multi-homing costs are high for at least one user side. Network effects are positive and strong-at least for the users on the side of the network with high multi homing costs. Neither sides users have a strong preference for special features.,G5 group,Step 2: Winning the battle,1, At a Minimum Cost or Differentiation advantages,ATC0,ATC,MR,MC,D,Quality,Price,Q,C,C0,P,ATC,MR,MC,D,Quality,Price,Q,C,P,D1,P1,Minimum Cost,Differentiation advantages,G5 group,Step 2: Winning the battle,2, Platform providers gain an edge when they have preexisting relationships with prospective,3, High expectations generate momentum in platform wars, so a reputation for past prowess helps a great deal,4,In a war of attrition, deep pockets matter,G5 group,ONE MORE THINGS .,G5 group,First mover not always decisive,Strong pressure to amass users as quickly as possible,G5 group,Challenge 3,Threat of Envelopment,G5 group,What is it?,Real damage: Your platforms functionality just as part of a multiplatform bundle.,Many Differentiated easy entry price maker,Monopolistic Competition,G5 group,How to do?,1. Change business models.,Business model,Managing a platform builds system integration skills that can be exploited.,Benefit Leadership Strategy: higher C , much higher q and P,G5 group,How to do?,2. Find a “bigger brother.”,Found allies through partnerships,Total solution by vertical integration,Cost & Benefit Leadership Strategy:,Higher q and P, lower cost due to larger scale,G5 group,How to do?,3. Sue: consider legal remedies by antitrust law.,Vigilance is crucial for a focused platform provider.,G5 group,Case Analysis,G5 group,Examples Of Two-Sided Networks,G5 group,CASE 1: CTRIP,G5 group,Subsidize to consumer,Two factors,consumer sensitivity to price is high,consumer strongly demands quality,Charge to producer,Agency fees for hotel reservation,Agency fees for air ticket reservation,Tourism products agency fees,Corporate travel service fees,Online advertising fees,Low price hotel,Cheap flights tickets,Cheap tours tickets,Hotel orders with cash coupons,Flights ticket orders with cash coupons,Points redeem,Pricing strategies,G5 group,Fighting strategies,Tourism products should pay for the agency fees,More consumer will bring scale value,All the platform are similar,The market will be served by one platform,Advantage,Hold the Market,First Mover,High expectations generate momentum,Deep pockets matter,G5 group,Enveloping strategies,Integrate the air tickers booking , hotel reservation and travel counseling businesses,CASE 2: WeChat Banking,G5 group,The New Way To Connect,G5 group,WeChat Features,G5 group,Bank,Individual customers,Platform,WeChat Banking,G5 group,Ability to capture cross-side network effects Achieve the cross-side network effects The real secret of success is not to buy the monetary fund The real secret of success is the application of technological innovation, customers can realize at the time of shopping as a automatic redemptions,User sensitivity to price In just four months, the scale broke the 100 billion Alipay users are very sensitive to price, especially Taobao users even to snap up all night The current interest rate now is 0.35%, while the product is more than 5.2%, up to 14.8times,The Reasons For The Success Of The Product,G5 group,G5 group,