MGSC01H3 Lecture Notes - Lecture 3: Google Play, Lexus Rx, Lyft
Document Summary
Horizontal differentiation: red vs. green cars: apples vs. oranges. Vertical differentiation: mac air w/ m2 chip vs. mac air w/ m1 chip, apples vs. organic apples, toyota camry vs. lexus rx. Platforms: apple app store / google play store, microsoft os vs macos, uber and lyft. Economies of scale = higher quantity reduce average cost per unit. Economies of scope = sharing of resources across business departments, product categories, or industries. Two-sided platforms for ecommerce/ride-sharing value prop: high wtp: convenience, speed, and variety low cost: does not own products. Choices: substantial subsidy in the beginning to kickstart network effect , scale leads to higher liquidity and more data to better match two sides of the market (more convenience and speed, attract long-tail products to maximize variety. Brick-and-mortar retail value prop: high wtp: in-person shopping experience + trust low cost: great scale economy (fixed cost >> variable cost)
