Catalyst Code: The Strategies Behind the World's Most Dynamic Companies - Hardcover

Evans, David S; Schmalensee, Richard

Hardcover

ISBN 10: 1422101991 ISBN 13: 9781422101995

Publisher: Harvard Business Review Press, 2007

Synopsis

More and more traditional businesses have developed the characteristics of what the authors call platform businesses that operate in multi-sided markets. A multi-sided market is one in which two or more distinct parties need each other and benefit by interacting with each other. A platform business is one that facilitates these interactions safely and securely by serving as a match maker such as a dating website that introduces and brings the distinct parties together and is paid for these matchmaking services, or a cost cutter like an auctioneer or a credit card company that expedites such interactions with great speed and efficiency, or a crowd pleaser like a magazine or a rock band that amasses large audiences of desirable customers whom other businesses want to reach. This concept of a business model - one where there is one seller and at least two buyers - differs significantly from the traditional one buyer-one seller market model, particularly in terms of pricing structures and participant incentives. Yet, most potential platform businesses set prices and incentives as if they were one-sided, thereby leaching profits and losing customers. American Express and Microsoft live by what the authors call the catalyst code consisting of five behavioral insights with practical implications. They argue that companies like HBSPCo could improve growth rates and overall profitability by applying the code systematically. This book helps managers to analyze their own operations, identify areas of business that could exploit catalyst opportunities, and map out a plan for transforming their pricing practices, incentive plans, and organizational structures to maximize the power of the three aforementioned catalyst business models.

About this title

From the Back Cover

What do Google, DoCoMo, Sotheby's, and MySpace have in common?
Google has done it with search-based advertising, and Japanese mobile giant
NTT DoCoMo did it with iMode. Sotheby's did it more than two centuries ago.
MySpace is doing it with GenY.

They all cracked the catalyst code-and they couldn't have done it using
traditional business strategies and tactics.

These two-sided businesses generate value by creating simultaneous and
mutually beneficial relationships among the different groups of customers
they serve. Google brings together advertisers and eyeballs through its
search platform. Simon Properties provides a place for retailers and
shoppers to transact. So does eBay-but on the Web.

In a book that challenges conventional wisdom about pricing, product
design, organization, and incentives, David Evans and Richard Schmalensee
provide the first step-by-step framework for launching and sustaining these
dynamic businesses. They examine the most successful catalysts or all time,
as well as many that tried and failed, and provide original insights into
the secrets from early history, modern-day business, and the author's
groundbreaking research into what really makes these companies tick.

Rapid advances in communication technologies are making it easier than ever
to link diverse groups into catalyst communities around the world. Evans
and Schmalensee say that is why two-sided businesses, or catalysts, are
today's power brokers-and they are quickly disrupting existing industry
ecosystems and gaining unprecedented prominence in the economy.

Whether you are an entrepreneur, executive, or investor, Catalyst Code
provides a complete guide to understanding the special dynamics and unique
problems that catalysts face-where the pitfalls are, and, most important,
how to make the most of the astounding opportunities.

Edition details

• Publisher: Harvard Business Review Press
• Publication date: 2007
• Language: English
• ISBN 10: 1422101991
• ISBN 13: 9781422101995
• Binding: Hardcover
• Number of pages: 228