Breaking News

HBR – What Uber’s China Deal Says About the Limits of Platforms

On August 1 Uber announced that it is selling its Chinese brand and operations to Didi Chuxing for $1 billion, its annual burn rate in that market, in exchange for a 20% stake in the local competitor.

The Uber-Didi deal reminds us that before your global strategy takes a platform-based approach, there are at least five questions to ask:

  1. How asset-light is the proposed approach really?
  2. Are there really global network economies?
  3. Do switching costs help sustain network advantages?
  4. What cross-country differences might favor national/local competitors?
  5. What are the sociopolitical constraints on market dominance?

Read more on article written by Pankaj Ghemawat