Study On The Product Competition, Platform Business Model And Governance Performance Based On Brocade Industry Chain

Brocade industry is one of the traditional industries that are listed in intangible cultural heritages in China, so it is very important to achieve modernization on the basis of good inheritance and protection of the industry. Due to the problems that exist in brocade industry, such as excessive competition, single industry chain structure and the unsustainability of traditional business model, There is an urgent need to discuss the motivation of the reconstruction of the industrial chain, the transformative influence of economic platform on the business model, platform management pattern of "reducing information asymmetry and improving the platform performance", and the innovative integration of the platform business model of brocade industry chain.As a new business model, brocade network platform connects with the parties of transaction and provides interactive mechanism for them. It changes the economic framework for traditional industries and has a profound influence on enterprise analysis that covers management philosophy, operation mode, governance mechanisms and performance evaluation. What’s more, it can contribute to completing the modernization of the brocade industry and enhance its industrial competitiveness.According to the integrated use of a variety of theories including vertical integration, two-sided market, platform economics, private order management and network performance, this paper shows the reasons and methods for the modernization of traditional industry as well as its analysis framework. The specific contents are as follows:(1) Vertical chain integration and the construction of the theoretical model of vertical platform. This paper aims at obsolete traditional industry business model in market competition as well as at the rise of bilateral market platform business model in the highly-networked environment. We analyze the weakness of vertical integration model, construct a vertical platform model, and explain the motivation of vertical integration, the pricing of the platform, and the analysis of welfare in the condition of network externality. This new model is the theoretical foundation of the reconstruction of brocade industry and the transformation of its business model.(2) The analysis of the product competition of brocade industry and the reconstruction of industry chain. Using structure-conduct-performance paradigm in industrial economics, we analyze the industrial structure and the competitive pattern. Additionally, using industry chain analysis method, we analyze the problems in each segment of brocade industry chain and the longitudinal collaboration relationship of the subjects in each segment. According to vertical platform theory model, we put forward a framework of the reconstruction of brocade industry chain, for there exists excessive competition in this industry.(3) The proposal of network platform business model of brocade industry and the specific scheme design. Using business model theory, we research systematically on the network platform of brocade industry and make an all-round portrait of the structure, elements, implementation methods, pricing strategy and core competitiveness of the platform business model. One the one hand, in the theoretical level, we refine the nucleus of the vertical platform theory model. On the other, in the practical level, we further meet the external requirements of implementing the reconstruction of brocade industry through the vertical platform theory model.(4) A study on platform governance in vertical industry and the pattern of network platform governance (i.e. an informal third-party governance model). With the use of the game model, it may effectively alleviate the problem of asymmetric information and enhance the stability of information search costs by studying the causes and conditions of informal third-party governance mechanism as well as its effects. On the basis of the further research on governance mechanism and pricing practice of brocade network platform, the paper also provides some solutions to the problems about how to establish a trust relationship between "strangers" on the brocade platform, and how to use the pricing mechanism of the platform to attract multilateral groups, which can help the network effects of platform play a better role.(5) A study on the efficiency of platform governance. The paper constructs a governance performance analysis system of network platform based on the theory of platform performance management. According to the data of Chinese textile industry after their E-business transformation and the growth of four typical trading platforms, the paper conducts a simulation on evaluating the performance of network platform, and analyzes the performance of Chinese brocade net which is implanted with platform for modernization. And then we propose some political supports and path selections of brocade industry chain reconstruction.This paper finds that:(1)on the basis of the combination of industry chain and platform economics, it can help to achieve the transformation of traditional brocade industry based on a rescue of "intangible cultural heritage" by analyzing the brocade industry chain and constructing business models; (2) Chinese brocade network is a service platform which shows the culture of brocade industry and facilitates product transactions, and it’s a proper business model chosen to achieve modernization of brocade industry; (3) the nature of brocade platform is a professional monopoly platform, on the one hand the focus of its governance mechanism is the trust relationship between parties on the platform, which curbs the opportunistic tendencies of both buyers and sellers by "signaling mechanism" and "reputation mechanism", and on the other hand its pricing mechanism can attract multilateral groups connected with the platform, which can capture and stimulate network effects; (4) there is a profitable opportunity in brocade platform for the traditional manufacturing process can be transformed to the connection points between demand and supply, which can contribute to achieving a positive cycle of scale development as well as improving performance and competitiveness of brocade industry.