We still talk about the “customer journey” as if it’s a neat, predictable path. But customers don’t follow our maps. They swarm—moving between social feeds, search results, and physical stores in fluid, non-linear patterns. Trying to force them down a funnel is futile. The real opportunity is to create a center of gravity for their activity. This is the essence of what is platform thinking. It’s a strategic pivot from directing journeys to building destinations—interactive ecosystems where customers, partners, and your brand create value together, on their own terms.
Once considered the domain of unicorns and start-ups, platform thinking has evolved and been adopted by established brands in a wide array of industries with great success. The potential of tapping into a new source of value creation has led to a lot of interest as well as some reservations in terms of the investment and mindset shift required. Thus the question we are frequently asked: “When is a platform business model right for me and my company?”
When Does a Platform Business Model Make Sense?
We share three stories illustrating how three different companies have harnessed the power of platforms to respond to three market dynamics that make platform thinking particularly relevant: rising customer expectations, competitive attacks and pricing pressures, and market pressures from intermediaries. Platforms create value through a process that is different from that which most companies are used to. They build advantage through demand-side economies of scale, or network effects, which occur when a product or service becomes more valuable to its users as more people use it. This is very different from traditional sources of competitive advantage that are built on supply-side economies of scale and optimize the means of production of a product or service. In platforms, value is created not by means of production but by means of interaction. The more consumers connect, the more interactions they have, the more value is created. This is particularly attractive as it means that platforms scale exponentially while value traditionally scales in a linear fashion. Let’s explore how Chinese consumer electronics giant Haier, North American farming equipment manufacturer John Deere, and Norwegian media group Schibsted applied platform thinking to their advantage.
When other companies are faced with this type of pricing pressure, a typical response is to provide a lower-priced version of the flagship product. Kodak introduced a lower-priced Kodak Funtime film roll to compete with aggressive price competition from Fuji. IBM introduced Ambra, a clone personal computer to compete against emerging competitors such as Compaq. But John Deere chose instead to invest in its product, technology, and customers. Tractors were equipped with sensors and state of the art autonomous driving technology that improved the efficiencies of the farm equipment. The real-time monitoring of data collected from farmers enabled precision agriculture that optimized the yields per unit of farming land. But beyond enabling its products with new technologies, John Deere also built an entirely new relationship with its customers and the larger business ecosystem in which it competes by adopting new platform principles that enabled, even more, productivity for farmers than its machines alone could realize. The MyJohnDeere.com portal allows farmers to make better decisions about how to get the best results from their land by combining the data from their tractors with weather and other data reports. For example, they can now analyze agronomic data in real time, including average yield, total yield, average moisture, seeding variety and rates, and more. The portal has further evolved into the John Deere Open Data Platform which lets farmers share data with other farmers and with third-party application developers. The SeedStar Mobile app, for example, captures row-by-row planting data which can be of help to optimize planter settings, diagnose potential problems, and scout fields. The potential of these applications rises when farmers share their data not just with other farmers, but with the entire agriculture ecosystems from the various suppliers and manufacturers to even adjacent experts such as academics worldwide. When everyone focuses on the goal of improving the yield of agriculture, everyone profits. And John Deere wins by strengthening its customer relationship and retaining its competitive position worldwide. Platforms as a way to preempt being squeezed out by intermediaries The Norwegian publisher Schibsted is a major player in 13 European markets, with presence in Indonesia, Thailand, Mexico, Dominican Republic, Colombia, Chile, Brazil and Morocco and Tunisia. Today, Schibsted also owns a few of the biggest European online classifieds sites like Le Bon Coin, Finn.no and Blocket as well as a range of other online classifieds sites, most if not all of which are immensely profitable. The story of how the company became a major leader in classifieds is a case study of how platform thinking can help companies resist intermediation. When Norwegian newspapers faced the risk of seeing their major revenue streams of classified advertising eliminated through digitalization in the late 90s, Schibsted decided to create a collaboration of the five main Norwegian newspapers, each one of which had unique strengths, and little geographic overlap. A few business model tweaks later, the common classifieds section was relaunched under a separate new brand, Finn, with national ambitions. By offering scale and visibility across Norway, the Finn brand became quickly known for trustworthiness and credibility, something emerging digital classified competitors did not have. Within 18 months, Finn took the No. 1 position in real estate, and then in cars and later in jobs. Within seven years, it took 90 percent of the national market in all major product categories of online classifieds. The success in Norway led to international expansion and a global leadership position in classifieds worldwide. The major reason behind the success of Schibsted is that it quickly acknowledged the difference between the news business and the classifieds business. One enables network effects, the other does not. They could not be managed the same way. It also recognized that it would be necessary to separate out the classified business. By setting up a separate entity to go after a market that was undesirable and low margin from the perspective of its newspaper business, it allowed a focused team to grow using a different model and even encouraged them to cannibalize the older, higher margin parent company brands. So how should companies use platform thinking to navigate the challenges of rising customer expectations and current or anticipated changes in the competitive context? Senior executives should begin by asking themselves these questions:
- How can we take advantage of our existing assets and capabilities and develop competitive advantage through network effects?
- How can we enable deeper relationships with customers, and consumers and other stakeholders in our ecosystem so that we can create more value for them?
- Which elements of a platform can we integrate into our products, services or business units to enable competitive advantage through network effects?
- Which elements of a platform business do we need to build ourselves, which do we need to acquire, and which should we provide through partnerships?
- What new capabilities do we need in order to collaborate and compete effectively in a platform world? How much of these capabilities do we have in-house and how much of these capabilities do we need to attract?
- What new business models should we deploy to capture the value and profit opportunities from platforms?
If you’re interested in platform thinking, check-out our 2-day workshop, or email agathe@vivaldigroup.com to discuss how Vivaldi can help transform your business with its platform approach.
Frequently Asked Questions
“Platform thinking” sounds complex. What is it in simple terms? Think of it as shifting from building a one-way street to building a town square. Instead of just selling a product or service to your customers, you create an environment where your customers, partners, and even your own internal teams can interact and create value for each other. The focus moves from controlling a linear process to cultivating a dynamic ecosystem where your brand is the central hub.
Is a platform model only for tech companies like Uber or Airbnb? Not at all. While tech giants are famous examples, the principles apply to nearly any industry. As the article shows, a farm equipment manufacturer like John Deere and a consumer appliance company like Haier have used platform thinking to deepen customer relationships and create new value. The strategy isn’t about the technology itself, but about using connection and interaction as a new source of growth.
What’s the real difference between building a platform and just improving our digital presence? A great digital presence, like a user-friendly website or app, is about delivering your company’s value to the customer more efficiently. A platform is fundamentally different because its value is created by the participants themselves. The key ingredient is the “network effect”—the platform becomes more valuable as more people use it. An e-commerce site sells products, but a platform like John Deere’s connects farmers with data and app developers, creating a value loop that strengthens with every new user.
This seems like a massive undertaking. What’s a realistic first step for a large, established company? You don’t have to rebuild your entire company overnight. A practical first step is to identify a single, high-friction point for your customers or partners. Ask yourself where a lack of connection or information is creating a problem. Then, consider how you could build a small-scale system to facilitate that connection. It could be a portal for sharing data, a forum for users to solve problems for each other, or a tool that connects your customers with third-party service providers. Start there and build momentum.
How does a platform actually create more value than a traditional business model? Traditional models create value through production efficiency—making a better product at a lower cost. This value scales linearly; making twice as many products creates twice the value. Platforms create value through interactions, which scales exponentially. Every new user who joins adds potential value for all existing users. This creates a powerful competitive advantage because the ecosystem becomes richer, more useful, and harder for competitors to replicate as it grows.
Key Takeaways
- Build Ecosystems, Not Funnels: The linear customer journey is an illusion. True growth comes from creating a central platform where customers, partners, and your brand interact and co-create value, generating its own momentum.
- Prioritize Interaction Over Production: In a platform model, competitive advantage shifts from supply-side efficiency to demand-side network effects. Value isn’t just made and sold; it’s generated exponentially each time users connect and share within your ecosystem.
- Use Platforms to Solve Core Business Challenges: A platform isn’t just a tech project; it’s a strategic answer to critical market pressures. Whether you need to deliver mass personalization, defend your price premium, or preempt market disruption, a platform model can fundamentally reshape your competitive position.