Several major manufacturers, such as Apple and Huawei, have evolved into platform-based companies, producing hardware products and developing complementary platform ecosystems (i.e., iOS and HarmonyOS) that connect two distinct groups: hardware product users and software developers. In this business format, manufacturers sell hardware products to consumers and open their platforms to software developers who provide services to end users. A distinct feature is that consumers must purchase hardware products to access software developers' services. A challenge that such firms face is how to balance pricing strategies on both sides and expand the user base. To address this issue, we consider a monopolistic manufacturer who employs three models to sell its hardware products: direct selling, reselling, and agency selling. The manufacturer builds a platform ecosystem to attract software developers to offer services to end users, charging an access fee (service price). Our theoretical analysis first reveals that adopting the reselling model reduces the service price but increases the product price, whereas the agency selling model yields an opposite outcome. Second, compared with the scenario without a platform ecosystem, establishing a platform ecosystem will expand the manufacturer's preference for agency selling over reselling. Third, the platform ecosystem can improve supply chain reselling efficiency under certain conditions; however, agency selling consistently decreases efficiency. Furthermore, contrary to traditional wisdom, when the commission rate is high and the cross-side network effect is low, supply chain efficiency under reselling surpasses that of agency selling. The expanded models yield robust results.
06月28日
2024
07月01日
2024
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