Leveraging the Elements of Digital Platform Economy for Enhancing Scalability of a Traditional Business Model Based on a Technology-platform
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Journal Title
Journal ISSN
Volume Title
Perustieteiden korkeakoulu |
Master's thesis
Authors
Date
2022-06-15
Department
Major/Subject
Strategy
Mcode
SCI3109
Degree programme
Master’s Programme in Industrial Engineering and Management
Language
en
Pages
88 + 5
Series
Abstract
The digital platform economy has become a hot topic over the last decade since many of the world's most prestigious companies have achieved their position through approaches based on platform business models, such as Amazon and Meta. Due to this, traditional companies have also become interested in leveraging the digital platform economy to increase opportunities to develop the business. However, the current literature does not offer an easily approachable method for exploiting the digital platform economy in traditional businesses. This thesis focuses on a technology consulting company that desired to enhance the scalability and profitability of a business model, which has a technology in the core but operates as a more traditional business model through selling and recruiting activities. This study aimed to take a more traditional, technology-platform-based business model towards a platform business model to achieve enhanced scalability and profitability by leveraging the elements of the digital platform economy. The design science research methodology was chosen for this study to explore the opportunities to enhance the scalability of the business model in a real-world context that is forward-looking in nature. This methodology enabled the creation of a feasible artifact, which in this study is an enhanced business model that allows the business to be more scalable. A literature review focusing on business models, the elements of the digital platform economy, and digital strategies was conducted to provide background for the empirical part of this study. Additionally, the CIMO-logic was applied through which the empirical part focused on exploring the research context and designing interventions to solve the identified research problem, as well as studying the potential beneficial outcomes of the interventions and mechanisms to activate the outcomes. The data for the empirical part was collected by going through the focal company’s internal documentation, conducting interviews and discussions with the employees of the focal company and partners, and directly observing the operations of the existing business model. The thesis resulted in 20 scalability enhancements that were used to build an improved business model. This is offered as a proposal for the focal company as a solution to enhance the scalability of the business model. The enhanced business model is proposed to be implemented with a two-stage roadmap—Immediate and Follow-up actions—to implement the 20 scalability enhancements into the business model. Moreover, digital strategic actions are applied jointly with the roadmap to increase the impact and success probability of the transformation towards a platform business model. Finally, this study provided evaluations of the potential outcomes of implementing the enhanced business model, as well as described various actions on how to reach the presented outcomes. Academically, this study built conceptual frameworks on the digital platform economy and digital strategic actions, as well as validated the use of design science research methodology jointly with the CIMO-logic in a strategical research topic. Practically, this study provided valuable insights for the top management of the focal company and generally top management of companies and business strategy professionals of the broader utilization of the digital platform economy.Description
Supervisor
Karhu, KimmoThesis advisor
Karhu, KimmoKeywords
digital platform economy, platform business model, digitalization, digital strategy, business model scalability, design science research