Case Study

DIGITAL PLATFORM ECOSYSTEM

Enterprise Analytics - Platform Company: How Big Data Drive Giant Digital Players
Swiss German University – MBA Class
by GROUP 5th

07.10.2020
MEET THE TEAM
GROUP 5TH

MUHYUDI
22053023

B R OTO WA S E S O
22053016

ANINDYKA L. E. MANULLANG
22053033

V I C TO R G U N AWA N
22053027

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CONTENT
A. C A S E S Y N O P S I S

B. R E L AT E D T H E O R Y

C. C A S E A N A LY S I S

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CASE SYNOPSIS
D I G I TA L P L AT F O R M E C O S Y S T E M

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A M A Z O N , A P P L E , FA C E B O O K , & G O O G L E
Four companies in particular,
capitalized at close to $1 trillion, ruled
four sectors of Internet marketing.
Online advertising was dominated by
Google, online retailing by Amazon,
and social engagement by Facebook,
while Apple set the standard for the
interface devices that were being
called “the remote controls for many
people’s digital lives.”
But there was no orderly vision of the
spoils of market-making among the
four. Each behaved as if it wanted to
claim marketing’s soul, fighting
skirmishes on sector boundaries as well
as in new sectors. Google and
Facebook competed for dominance of
online advertising. Apple’s iTunes and
Google Play challenged Amazon Prime
over the retailing of digital content.
Apple and Google fought to own the
smartphone market. Apple, Google,
and Amazon contested streamed
video services. Payment systems,
banking and travel were vertical
markets where none were yet
dominant, but competition was no less
fierce.
Throughout the field of online
marketing, from distribution to
communication to digital product
formats to, ultimately, pricing, these
four companies battled to set
standards. Any one of them could
aspire to establish the dominant
design for all of online marketing. 5
ANT FINANCIAL
Ant Financial was the financial technology (fintech) company behind all the flashy figures.
Since the inception of Alipay in 2004, Ant Financial had grown into a fintech “unicorn”4
(i.e., a private company valued at USD 1 billion or more) with an estimated valuation of
USD 75 billion.5 A major player in the Chinese fintech space spanning a wide range of
subsectors, Ant Financial had effectively established an ecosystem centering on Internet
finance with 451 million active users in the third-party payment business alone.6 The
fintech empire that the company created had operations in mobile and online payment
(Alipay), money market funds (Yu’e Bao), comprehensive wealth management (Ant
Fortune), digital-only banking (MYbank), credit scoring (Zhimab Credit), consumer credit
portals (Ant Credit Pay), cloud technology platforms (Ant Financial Cloud), and insurance
service platforms

Topping the 2016 Fintech 100 Ranking as a “Leading Global Fintech

Innovator” in a report published by H2 Ventures and KPMG,155 Ant
Market Share FinTech Financial was poised for an IPO of unprecedented proportions.156 Chen
pinpointed that Ant Financial was tackling “the challenge [of] how to get
inclusive, sustainable growth” with an ultimate goal to “[make] finance
accessible [with an] affordable price.”
As Chen readied himself to address the executives in the conference
room, his mind was occupied with the issues at hand. Ant Financial was
facing several dilemmas. First, the process of overseas expansion would
likely not be smooth sailing. Some of the challenges that the company
would likely face included rising operating costs overseas, coordination
complexities, and cultural and regulatory differences. Was Ant Financial’s
current strategy of globalizing its business an optimal one? How should
the company accelerate its expansion overseas? Second, its current rural
strategies served only a fraction of China’s rural landscape. With a lack of
proper infrastructure along with other logistical challenges, how should
the company roll out its inclusive finance initiatives in China’s vast rural
areas? Third, how should Ant Financial manage its relationship with
traditional banks and navigate the regulatory uncertainties (domestic and
international)?
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RELATED
D I G I TA L P L AT F O R M E C O S Y S T E M

THEORY

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D I G I TA L P L AT F O R M
ECOSYSTEM Developing the Framework
Initial Characterization of the Framework
Background
(Moore, 1996; Iansiti and Levien 2004; Muegge, 2013; Jacobides et.al., 2018).
Lansiti and Levien attribute the business dominance of Walmart and Microsoft to
the success of their respective business ecosystems.
They define these ecosystems as “loose networks of suppliers, distributors,
outsourcing companies, makers of related products and services, technology
providers, and a host of other organisations that affect and are affected by the
creation and delivery of a company’s own offering” (2004).
Reviewing, Refining and Validating the Framework
Defenitions
Jacobides (2019) defines digital ecosystems as “interacting organisations that are
digitally connected and enabled by modularity, and are not managed by a
hierarchical authority”.
The Role of Digital Ecosystems
Lansiti and Levien (2004) suggest business ecosystems create value to the end
consumer by leveraging a symbiotic relationship whereby platform owners (for
example Microsoft) enable others (for example software developers) to create
products on the (Windows) platform, that have the potential to strengthen the
(Windows) ecosystem, thus giving everyone involved “a collective advantage over
competing networks”.
The Framework

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 CASE ANALYSIS
D I G I TA L P L AT F O R M E C O S Y S T E M

1. What is the tension between west digital companies

(Amazon, Apple, FB, Google) vs East Digital Players (Alibaba).
2. What is value creation and value capture on each companies
(Amazon, Apple, FB, Google, Alibaba).
3. Draw the digital ecosystem that they build (Group-5 Tencent
China, Group-6 Baidu China). For Group 5 and 6, You may
find Tencent and Baidu references from any sources, I let you
explore it.
4. Give your recommendation to your company (for example
United Tractors), how your company' ecosystem and possible
on capturing the new sources of revenue/value in the future.

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QUESTION #1 What tension between west digital companies (Amazon, Apple, FB, Google) vs East Digital Players (Alibaba).

• Both of them do technology war which the winner will not simply claim the economic
spoils, but the ideological ones, too.
• West digital company have advance technology, but
• East Digital Players (Alibaba) was growth rapidly, its impact on the global market in
areas like AI, cloud computing, self-driving cars, gaming etc
• They compete to win market domination
• Product
• Baidu vs Google  Search Engine
• Tencent vs Facebook  Internet experience, Social Network,
• Alibaba vs Amazon  Internet retailing market
• Different Strategy digital platform or ecosystem
 In the West, the majority of apps have a single function such as chatting via
WhatsApp, searching via Google but East digital player, their apps multifunction
(single place)
 Different payment service, Cash less via Bank or platform fintech
 Company valuation  Market Cap
 Customer behavior data  Big data analytics

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QUESTION #2 What is value creation and value capture on each companies (Amazon, Apple, FB, Google, Alibaba)?

Company Core Competencies and Capabilities

Facebook Social networks, online advertising

Google Online advertising, retailing of digital content, digital media

Amazon Online retailing, E-commerce
Apple Digital media, Operating software

Alibaba E-commerce, financial platform

Company Overlap Unique

Facebook Local retailing (discover local offline businesses) Launched Facebook exchange, and ad-bidding and retargeting
network
Google Text advertising ,Launched free web mail service (Gmail) and operating system and Online music storage
Bought YouTube
Amazon Online book store and e-retailing Cloud computing services and Enter the Smart phone market
(show rooming)
Apple Apple led Google for all apps like: news, videos, sports, Android devices had less market share
blogs, social media, and maps

Alibaba reorganize a good chunk of the Chinese financial sector Hybrid business model, charging small sellers with advertising
around the Ant Financial platform services, charging large business with business operations fee

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QUESTION #3

TENCENT INC.

Tencent was founded in November 1998 as Tencent Inc in China.

It’s the one of the largest Internet comprehensive service providers in the
world and the second largest internet companies in China.
At the beginning, the first product provided by Tencent is an instant
messenger named QQ, which was very successful when it launched, by the
end of 1999, there are one million registered users of QQ in China.
With the passing of time, Tencent has increasing number of services,
including social network, web portals, e-commerce, and multiplayer online
games and so on. In 21st Jan. 2011, another successful product, WeChat
launched and had rapidly speed to occupy the market. By the end of first
quarter of 2015, WeChat has covered more than 90% of China's smart
phones, the monthly active users reached more than 549 million, users
cover 200 countries and more than 20 languages
By the end of 2015 third quarter, the total revenues of Tencent were USD
4181 million which is an increase of 34% over the third quarter of 2014, and
the operating profit was USD1624 million, which is an increase of 37% at
the same period.
With the development of Tencent, in terms of one of products of Tencent,
QQ is not only an instant messenger and WeChat is no more chat tool, both
also have more functions to meet users’ demands.

[Tencent’s roadmap http://www.tencent.com/en-us/at/ roadmap.shtml].

[The latest data of WeChat http://www.chinastor.org/GuoNeiXinWen/8697.html].
[Tencent Announces 2015 Third Quarter Results http://www.tencent.com/en-us/content/at/2015/ attachments/20151110.pdf].
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QUESTION #3 TENCENT INC. DIGITAL
ECOSYSTEM
(1) It can be found that from No 1 to No 8, the meaning is that QQ provides large installed base of
customers to other platforms; No 1, No 3 and No 4 show QQ provides a spread channel for QQ
game, QQ music and Q-zone; No 5 and No 13 present that QQ bring payment business for Tenpay
and Tenpay returns for payment system and services. No 9, No 10, No 11, No 12, No 14, No 15 and
No 16 mean that these products bring QQ traffic and more users.
When WeChat launched, one way to get users is from QQ, and another way is from users’ address
book, hence, WeChat’s users come from QQ, but not all of them. In fact, all the platform of Tencent
share the users base all the time, because a QQ account number could login in all the products of
Tencent.
(2) No 10, No 2; No 17, No 18; No 24, No 23; No 26, No 25; No 28, No 27 and No 30, No 29, these
arrows connect QQ, Com with other products, QQ. Com brings these products a spread channel and
they return traffic for QQ. Com, because in PC, all platform products could be downloaded from QQ
patrol.
(3) No 19, No 20; No 23, No 14; No 35, No 36; No 13, No 5; No 37, No 38; No 44, No 43; No 46, No
45 and No 48, No 47, these arrows show the connection of Tenpay and the rest of products. Tenpay
as a basic tool platform provides payment services for every platform on which users need to pay for
value-added services. Tenpay bring payment system and services for these products and they offer
payment business and entrance for Tenpay.

(4) No 32, No 31, No39 and No 40 demonstrate the relationship between Q-zone and QQ Music, Q-
zone and Tencent video, respectively. QQ Music and Tencent video bring content services and traffic
to Q-zone; as return, Q-zone bring traffic and more users to them, because Q-zone offers channel to
get music, video (also comic and literature) services, and then, they could bring much more traffic.

(5) No 41, No 42; No 33, No34; No 16, No 8; No 43, No44; No21, No22; No49, No50 and No 51,
No52 show the interaction between Myapp and the rest of products. In Android mobile system, all
platform applications could be downloaded from app store, so Myapp brings a spread and
download channel for these products, they bring a lot of traffic for Myapp.

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HEAVY
QUESTION #4

EQUIPMENT United
Used HE
Players

MARKET Banks
Tractors

Leasing Co.
ECOSYSTEM
Most of unidentified market is retail market. Project
“datafy” every interaction with them by Owner
providing an internet ecosystem that reliable
to provide them from just information to Heavy Equipment
Customer Market Ecosystem
solution

New resources of revenue :

Secondary
1. UTpay HE
2. Ads on HE Market Ecosystem
3. Online Search on HE Market Ecosystem
Rental Competitors
Players
Non
Genuine
Parts
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HEAVY EQUIPMENT ECOSYSTEM-
QUESTION #4

ILLUSTRATION

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THANK YOU
D I G I TA L P L AT F O R M E C O S Y S T E M
APPENDIX 1

U.S. Mobile Search Ad Revenue on U.S. Mobile Display Ad Revenues at Top 4

Search Engines, 2012, $Bio Sites, 2012, $Bio
0.13 0.33
0.13
1.48 0.22
1.87
0.13

Facebook Google Pandora

Google All other Twitter Others

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APPENDIX 2

U.S. Online Search Ad Revenue on U.S. Online Display Ad Revenues at Top 5

Search Engines, 2012, $Bio Sites, 2012, $Bio
0.27 1.04 2.31
1.26
1.26 7.92 2.16

12.1 1.4
4 0.54 0.68

Google Microsoft Yahoo Google Facebook Yahoo!

AOL Other Microsoft AOL Others

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