145 coca cola 2017 annual review 97 mckinsey global

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Coca-Cola, 2017 annual review.

97 McKinsey Global Institute Globalization in transition: The future of trade and value chains
Platform
Some of the world’s biggest companies operate technology-enabled marketplaces
that either facilitate exchanges between counterparties (for example, Amazon, Alibaba,
and Flipkart) or provide tailored offerings to large captive customer bases (for example,
Tencent Video and Spotify). While the term “platform company” is often discussed, it is
not well defined. Digital platforms can play several functions in facilitating transactions:
search, coordination, payment, and product delivery. Companies can play in one or more
of the parts in a platform value chain. E-commerce platform providers, for instance, play
all functions. PayPal strictly facilitates payments. Other platforms, such as Facebook and
Baidu, enable customers to search for sellers and may even coordinate transactions, but
they do not collect payments or deliver goods. For all platform companies, a capital-light
business model enables them to scale up rapidly—and because of increasing returns to
scale, only a few companies will succeed globally in each product or service market. Their
operations remain highly centralized.
The biggest hyperscale platforms host billions of users and interactions. Delivering an
additional song through iTunes or welcoming a new user to a social network results in
effectively no cost for Apple or Facebook, respectively, whether it is the tenth unit or the ten
billionth. This kind of scale gives platform operators a prime position to capture troves of
valuable behavioral data that they can monetize, employ to make continuous improvements
to the ecosystem, or even use to add new business lines (as with Amazon’s move into cloud
computing, Apple’s move into digital payments, or Alibaba’s move into financial services).
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While the biggest consumer-facing social media, entertainment, and e-commerce sites
are well known, some platform companies are focusing on the B2B space. These include
Xometry, a US-based marketplace for on-demand manufacturing capacity, and EC21, a
South Korean B2B e-commerce platform for small and medium-size exporting firms.
Networker
Networked companies, most of which are service providers, have multiple decentralized
and geographically dispersed operational nodes. Examples include financial services,
business and professional service providers, telecom companies, and transportation
companies. Their sales, operations, and supply chains are often local, exclusively serving
one node, but value is created through their global reach and expertise.
This approach is often taken in banking, IT services, and business services—industries
where knowledge flows, customized to serve client needs, are the heart of the offering
and the competitive advantage. HSBC, for example, is a wholesale and retail bank with
its core markets in Hong Kong (where it originated) and the United Kingdom (its official
headquarters). But it has a presence in almost 70 geographies globally, including major