Research On Solutions Of Boundary Expansion By Internet Enterprises Under Platformization Strategy

Internet industry started in the early1990s in China, a steady stream of innovative technologies has brought new business models and new economic growth point for internet enterprises, then a group of Internet companies have been in birth, whose core business is technology or business development. As the Internet industry will become increasingly mature and walked into the mobile Internet era, the platform has become the strategic direction of all Internet giant companies, Baidu CEO Yanhong Li has said that "the era of mobile Internet needs platform Thinking." Platform means boundary expansion, new investments, mergers and acquisitions, alliances have been taken as frequently used means of expanding the boundaries of Internet companies, and these three ways are related to the trading between enterprises or enterprises and users, therefore, examining transaction costs has become a problem.This thesis is based of the transaction cost theory, takes three ways to expand the boundaries of the enterprise as objects for analysis, combined with the basic features of Internet companies, using literature review, qualitative comparison and case studies to study the selection process of Internet business platformazion expansion. The decision of boundary expansion approach means not only to consider the external costs of consumption, but also consider the impact on insider trading after the completion of the transaction. After these three basic characteristics and the way the cost impact analysis, the thesis innovatively put forward a decision-making framework for enterprise boundaries based transaction cost theory. Considers in the ways of new investment,strategic alliances and acquisitions, transaction object features and the platformazion needs, and influence in both internal and external transaction costs are mainly based platform decisions. The purpose is to minimize the internal and external expansion cost. Using this framework, Alibaba acquisition the GaoDe map will have a reasonable explanation. The inadequacies of this paper is only taking a qualitative way of this framework, to verify the theory of was only based on one case, the relationship between transaction cost factors had no detailed study, future efforts will be taken.The thesis is organized as follows:The first part is an introduction. Introducing the research background and significance, research methods, content and framework as well as innovation and shortcomings.The second part is the theory summary of enterprise boundaries expansion. Cited by way of relevant literature and theory, from a transaction cost perspective and strategic perspective and the ability of companies perspective to explain boundary expansion theory, and to sort out as a certain logic. Transaction costs perspective is mainly divided into the concept and scope of the transaction costs, factors and the explaining point of the enterprise boundary; strategic perspective and the ability of the enterprise perspective is mainly based on the interpretation of the angle of internal governance, it can thereby affecting the enterprise transaction costs constituted. Finally cited new research progress in expanding the boundaries of Internet companies, then made a brief evaluation.The third part describes the transaction cost theory under the platform of the Internet companies. Firstly introduced the general features of Internet companies. Network externalities, path dependence, Matthew and new barriers to entry characteristics have made the Internet business differently from the traditional enterprises which took labor and capital as factors of production for the input-output relationship, but internal or external trade relations as the main behavioral characteristics, and the expansion of Internet business platformazion is the inevitable means to strengthen its main features, which makes Internet business transaction costs have a new performance. Decision-making should also consider transaction costs in the process of expanding but also the platform organization operations cost after the expansion.The forth part compares the transaction costs under the platformization of the boundary expansion means. Proposed that new investments, mergers and acquisitions, strategic alliances are three ways to shape platform, based on transaction characteristics of these three methods, which have different strengths and weaknesses in the platform process, companies are minimizing the internal and external transaction costs for decision-making goal.The fifth part selects Alibaba acquisitions Gaodemap case to applied theoretical framework previously, through specific transactions compared transaction costs for new investments, mergers and acquisitions and strategic alliances, we can conclude that mergers and acquisitions is the best decisions from the perspective of transaction cost saving, then verifie the effect of the acquisition.The last part presents a summary of the research findings of the article and the later prospected.