Platform economy: Swiss companies under pressure to act

Marketplaces and platforms have always been central places where people meet to trade, make contacts and exchange services. They expand the business field of traders and connect them with potential customers. The difference with the age of Industry 4.0 is that digital markets follow the rules and mechanisms of digital transformation, their trading space is global rather than local, and they are not subject to any time restrictions.

US companies dominate the platform economy

U.S. companies such as Google, Amazon, Facebook and Apple (GAFA) are dominating ever larger parts of value creation and gaining relevance in more and more markets. Characteristic of them is their network structure - as the number of their participants increases, so do the benefits and attractiveness of the platforms. The resulting growth of the network can lead to market concentration or monopoly.

Bringing together the needs of users and providers

In some cases, platforms are launched by companies that originally had nothing to do with the services or products sold on them. For example, with the introduction of the iPhone, the computer manufacturer Apple has put established cell phone manufacturers such as Nokia, Samsung and Sony Ericsson on the spot. The reason for the iPhone's commercial success is not just its clever design, but the ability to install applications on it that are offered exclusively on the proprietary App Store. The Store has become a busy online platform where iPhone users download their apps, while software developers offer their applications for sale there. Both sides rely on the platform as a marketplace - they become tied to the platform.

At high speed to a dominant market position

Google, Amazon and Facebook have also managed to build up a monopoly in a similar way. Among other things, it is significant that they have continuously expanded their online activities, which has further accelerated the aggregation of users. The speed with which they are capturing the market is frightening.

But this development also creates opportunities. Thanks to the platform economy, companies can successfully use digital business models to increase revenue. In addition to the right business model, this requires above all broad know-how in the IT field, optimized business processes, and also flat hierarchies that promote the process of developing innovative ideas. Swiss companies would be well advised to try to develop strategies for using online platforms to their own advantage or even to build their own platform models. Because anyone who sleeps now runs the risk that the competition will be faster and siphon off market share.

Online B2B marketplace offers opportunities for many industries

The B2B marketplace "Wer liefert was" is a typical platform whose network is constantly growing and which can be used by companies in any industry to increase their online visibility to potential and existing customers, but also to open up an additional sales channel. Online marketplaces and platforms have long been established in the end-customer business. For example, more and more companies are using online trading platforms such as Ebay as an additional or even main sales channel. But new perspectives are also opening up for trade between companies. For example, the online mail order company Amazon has now opened up its platform for the B2B sector in Germany, as it did previously in the USA. For the European region as a whole, however, the growth strategy of the online platform "Wer liefert was" is even more significant. The leading B2B marketplace in the DACH region has laid the foundation for the digitization of the European B2B market with the acquisition of the European platform EUROPAGES.

For professional corporate buyers, procurement via B2B marketplaces is becoming more and more commonplace. For retailers, they are a good way to tap into new markets and sales opportunities. SMEs and specialist retailers in niche segments, who only have a low level of brand awareness, also benefit from the reach of online marketplaces. "Companies in the metal and mechanical engineering industries in particular often invite their customers to visit a trade fair to present their products and technologies," says Peter F. Schmid. "At the same time, the reach of a trade show booth is relatively small, and professional buyers today primarily begin their search for suppliers with a search on the Internet anyway," explains the CEO of "Wer liefert was" and adds: "Complex high-tech solutions in particular can be visualized online in an ideal way with images, video and 3D animations."

Platform economy for Swiss SMEs

Digital platforms are making competition in the B2B segment more complicated and dynamic. It is therefore of elementary importance that companies develop an individual platform strategy. Many companies do not yet have an answer to the current challenges and underestimate the importance of the new opportunities for their business success. Swiss companies must ask themselves what role they would like to play in the future and how they can exploit opportunities.

It's not about making every company a platform operator - it's about adapting quickly to new conditions. While this can mean that they build and operate platforms themselves. But it can also mean that they are represented on various platforms as providers and support them if their openness makes them particularly conducive to their own business model. The losers of the digital transformation will be those who have been focused on a traditional business model for too long and react too slowly to the new developments.

Today, as in the past, marketplaces are important platforms for meeting, cooperating and doing business. In the digital world, they provide the infrastructure that analog companies need to establish trading relationships online with little effort. Their development is far from complete and their power and potential are huge.

What is platform economy?

Digital platforms bring providers of products and services together with customers in an online marketplace. The platform operator earns through fees charged by providers, and customers may be subject to access restrictions. Digital platforms have so far been predominantly found in the private customer market, but are pushing into the B2B sector with increasing relevance for the manufacturing industry. Digital platforms are one of the most important transformational phenomena of digitization in recent years. Platforms as a communication and marketing channel for brokering products and services are now an integral part of the digital economy.

Author:
Christian Iten is a marketing consultant at PULSCOM ! www.pulscom.ch