Reprint: R1406F
Almost every retailer looks to Google to refer customers, and it’s rare to find a manufacturer whose products aren’t sold on Amazon. But these and other big platforms can capture a disproportionate share of the value a company creates: Buy an app on iTunes, and Apple takes 30%. The author presents four strategies to help businesses reduce their dependence on powerful platforms.
Exploit the platform’s need to be comprehensive.
American Airlines’ strong coverage of key routes made its presence on the travel website Kayak indispensable to Kayak’s value proposition. As a result, AA negotiated a better deal.
Identify and discredit discrimination.
Public complaints that eBay was giving search prominence to suppliers who advertised on the site forced a reversal of the policy.
Create an alternative platform.
When MovieTickets was on the verge of dominating phone and online ticketing, Regal Entertainment and two other large theater chains formed Fandango.
Deal more directly.
People ordering takeout through online platforms like Foodler and GrubHub have often already chosen their restaurant. Restaurants that deal directly can exit the platform.
