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Platform Ecosystems by Amrit Tiwana

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Chapter 3

Why Platform Businesses Are Unlike Product or Service Businesses

Abstract

This chapter explains how, unlike product and service businesses, platform businesses can target microsegments of their markets, create durable revenue streams, and offer opportunities to sustain higher margins. It explains how managers’ mindsets, assumptions, and mental models must evolve to be cognizant of fundamental structural differences in platform ecosystems. Therefore, platform businesses must be managed differently from product and service businesses, with architecture rather than authority and contracts providing coordination, orchestration foreshadowing conventional notions of management, and platform owners walking the tightrope between granting ...

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