Platform business model actually reduces cost and increases value of the business by providing better networking. A “platform” is a plan of action that makes an incentive by encouraging trades between at least two associated gatherings, generally buyers and manufacturers. So as to influence these trades to happen, “platform” utilizes and makes expansive, versatile systems of clients and assets that can be gotten to on request. Platforms make groups and markets with arrange impacts that enable clients to connect and execute. Example is Uber. They have created a platform where the owners of the cars are connected to potential hirers. Platform business helps to offer items or administrations, to produce substance and resources. Yet, the stage proprietor accordingly does not fabricate the items that get sold. They don't give the administrations that get offered on their stage. They don't make the substance that gets produced every day. Facebook or YouTube has no content of itself. Uber does not have a car of itself. Therefore thy only provide a platform for business on which the vendors and the customers meet (Saebi and Foss 2015). This is an intelligent business strategy that reduces cost and increases reach and possibilities.
There has been a trend of business acquisition lately where big companies like Facebook, Google and Microsoft is buying Whatsapp , Android and Linkedin. There are various other examples. This helps the bigger companies in increasing value of the company by acquiring successful but smaller companies (Han, Suh and Shin 2016)
Vast organizations don't gain little organizations for immediate profits. “Income products, benefit products, premium over the past financing”, these are measurements utilized by venders to help decide a base worthy cost. That is the value that "pays for" enough predictable upside that it's not worth rolling the dice against future inconveniences or the doubtfulness of an exit. Bigger acquirers couldn't care less about little organization financials in light of the fact that numerically those won't influence the development or estimation of the acquirer. An organization with $100m/yr in income growing 30% yearly won't experience the exertion, hazard, and diversion of purchasing an organization with $1m/yr in income growing 100% every year, since that is just a minor 1% or possibly as much as 2% of extra development. Or maybe, purchaser conduct is established in their methodology — a blend of item postulation, their hypothesis of their market's advancement, how they have to position for clients and against contenders, their long haul mark improvement, geographic development designs, and similar factors.
The platform strategy is the business model where the company itself does not produce any content or product. It basically provides a platform where existing manufacturers of products or services may sell these to the customers (Moser and Gassmann 2016). Alibaba or Amazon are platforms where the producers may list their products and buyers may buy. There is difference in the promotional strategy as well. In the platform strategy the company has to target both the buyers and sellers so that the platform is considered better than similar other platforms. In product strategy the target is mainly the buyers and customers.
Han, E., Suh, B. and Shin, S.K., 2016. Developing a Reference Model for Analyzing Mobile Platform Business: From an Ecosystem View.
Moser, D.J. and Gassmann, O., 2016, June. Innovating Platform Business Models: Insights from Major Tech-Companies. In ISPIM Innovation Symposium (p. 1). The International Society for Professional Innovation Management (ISPIM).
Saebi, T. and Foss, N.J., 2015. Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions. European Management Journal, 33(3), pp.201-213.