‘REMOTE CONTROL’ BIZ The rise of digital streaming on TV opens up new advertising and e-commerce opportunities for LG Electronics. —DORIS DUMLAO-ABADILLA There may come a time when iconic Korean home appliance manufacturer LG Electronics will earn more from people clicking on the remote control, browsing through channels on smart TVs—not necessarily LG-made—than selling TVs around the world. Every year, LG Electronics sells almost 100 million new TV and other appliance units.
Across 180 countries, 500 to 700 million of such household devices are up and running. What if these devices are connected and upgraded to provide platform services, similar to how Apple has gone beyond selling iPhone and iPad products, into building a thriving e-commerce ecosystem out of mobile users? This is what happens when one transforms from a products firm to a platform company. Bain & Co.
defines a platform strategy as a “holistic approach that fosters interactions and transactions among diverse users, facilitating a dynamic ecosystem of value exchange.” Aside from Apple, some of the world’s most valuable companies today are those that provide platform services, like Microsoft, Alphabet (Google), Amazon and Meta (Facebook). “Whereas a traditional product follows a linear path from supplier to customer, a platform is multi-sided, with owners orchestrating interactions between two or more parties.
The power of platforms lies in their network effects—as more producers and consume.
