Demand-Side Economies of Scope in Big Tech Business Modelling and Strategy

The purpose of the paper is to discuss the issue of economies of scope in platform research and to attract attention to the importance of scope economies for the strength and growth of Big Tech corporations. Hitherto, most attention has been on network effects and demand-side economies of scale, on...

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Bibliographic Details
Published inSystems (Basel) Vol. 10; no. 6; p. 246
Main Authors Henten, Anders, Windekilde, Iwona
Format Journal Article
LanguageEnglish
Published Basel MDPI AG 01.12.2022
Subjects
Alliances
Big Data
Big Tech corporations
Business models
Cost control
Demand
demand-side economies of scope
Economies of scale
High technology industry
Product lines
Production costs
United States > US
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Summary:The purpose of the paper is to discuss the issue of economies of scope in platform research and to attract attention to the importance of scope economies for the strength and growth of Big Tech corporations. Hitherto, most attention has been on network effects and demand-side economies of scale, on the role of platforms in lowering transaction costs, and on the importance of big data. More specifically, the research question addressed in this paper is how economies of scope, driven by the demand side, contribute to the strength of successful Big Tech corporations. The answer is related to two aspects: one is concerned with bundling of services and products, and the other with the acquisition and processing of data on users and their activities using digital services and applications.
ISSN:2079-8954
2079-8954
DOI:10.3390/systems10060246