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Which of the following statements about platform business is true

A. It is organized along a linear value chain.
B. It creates value not only for the businesses but also for consumers.
C. It is a new business phenomenon that did not exist before the advance of technology and smart phones.
D. Its overarching purpose is to create wealth for its employees.

1 Answer

3 votes

Final answer:

The true statement about platform businesses is that they create value for both the businesses and consumers by facilitating exchanges between various user groups. This model capitalizes on specialization within the value chain, driven by improved communication and transportation which allows businesses to focus on their core competencies.

Step-by-step explanation:

The statement about platform businesses that is true is that it creates value not only for the businesses but also for consumers (Option B). A platform business is a model that facilitates the exchange of value between two or more user groups, typically a consumer and a service or product provider.

With the splitting up of the value chain, businesses tend to specialize in specific parts of the production process, such as designing, manufacturing, or marketing. This specialization has become increasingly possible due to advancements in communication technology, which allows for better sharing of information and improved transportation logistics.

Such a way of conducting business is not restricted to recent technological advances, as historical precedents show that platform businesses have existed before the era of smartphones and modern technology. Importance is placed on the intra-industry trade and core competency, where companies and countries benefit economically by focusing on specific parts of a product's creation, leading to innovation and efficiency gains.

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