The main objective of this bachelor thesis is to try to identify how cultural differences might affect the running of platform-based businesses in Russia and China. Moreover, this thesis attempts to offer a rationalization for bringing up new businesses in the respective countries. Aspects such as the main driving forces behind the imbalance faced today between the two respective markets will be investigated and its possible link to the respective culture will be discussed.
The rise of the internet in the 1990s changed the business world to a great extent. A wave of new business models overtopped the economy, one of them the so-called platform-based business model. A platform-based business connects the customers directly with the traders, operating as a modern middleman. Especially C2C markets, consumer-to-consumer marketplaces, where the platform operates as a middle-man between two independent private parties, have increased in popularity. However, since then, a world without platform-based businesses seems unimaginable, as this business model affects all markets, including B2B, business to business, and B2C, business to consumer. Corporations like Amazon, Google, Facebook, and Alibaba are just a few of examples to illustrate the impact this business model created on everyday life. Especially to Millennials and Gen-Z, these companies serve as an attractive labor source and their outputs are used by them on a daily basis. Although the impact of this business model is universal, there are cultural distinguishing factors regarding expanding these businesses among countries. The thesis at hand tries to investigate the cultural differences in expanding a platform-based business in China and Russia.
Table of Contents
1 Introduction
1.1 Realization
1.2 Objectives of the Thesis
1.3 Non-Objectives of the Thesis
1.4 Research Questions:
1.5 Methodology
2 The Platform-based Business Model
2.1 The Evolution of Platform-based Businesses
2.1.1 The Roots in Ancient History
2.1.2 The Accessibility of the Internet to Consumers
2.1.3 The Dot-com Bubble
2.1.4 The Financial Crisis
2.1.5 The Impact of Covid-19
2.2 Platforms as a Business Model
2.2.1 The Four Columns of the Core Transaction
2.2.2 The Four Core Functions of Platforms
2.2.3 Platform Types
2.2.4 Exchange Platforms
2.2.5 Maker Platforms
2.2.6 The Power of Using the Network Effect Right
2.2.7 Modern Monopolies
2.3 The Importance of Platform-based Businesses in the 21st Century
2.3.1 Financial Drivers of Platform-based Businesses
2.4 Summary of the Platform-based Business Model
3 Current Market Analysis of Platform-based Businesses
3.1 Current Market Situation in the United States of America
3.2 Current Market Situation in China
3.3 Current Market Situation in Russia
3.4 Summary of the Current Market Analysis of Platform-based Businesses
4 Cultural Analysis
4.1 The Reasoning behind choosing both - Hofstede and GLOBE
4.2 Hofstede Model
4.2.1 Comparing and Contrasting China to the United States of America
4.2.2 Comparing and Contrasting Russia to the United States of America
4.2.3 The Main Differences between China and Russia
4.3 GLOBE Study
4.3.1 Comparing and Contrasting China to Russia
4.4 Summary of the Cultural Analysis
5 Applying the Cultural Analysis to the Current Market Situation
5.1 Applying the Cultural Analysis of the Current Market Situation in China
5.2 Applying the Cultural Analysis of the Current Market Situation in Russia
5.3 Compare and Contrast China to Russia
5.4 Summary of Applying the Cultural Analysis to the Current Market Situation
6 Discussion and Conclusion
7 Appendix
7.1 Definition of the Used Terms:
8 List of References
Research Objectives and Themes
The thesis investigates cultural differences in expanding platform-based businesses specifically within the Chinese and Russian markets, aiming to provide a rationalization for market imbalances and offer strategic insights into the cultural factors influencing these economies.
- The evolution and global importance of the platform-based business model in the 21st century.
- Comparative market analysis of platform dominance in the US, China, and Russia across five key categories.
- Deep cultural analysis using the Hofstede Model and the GLOBE Study to identify relevant societal drivers.
- Interpreting the link between national culture, bureaucratic factors, and the expansion patterns of local and foreign platforms.
Excerpt from the Book
The Roots in Ancient History
The origin of markets and marketplaces reaches back to when humans first engaged in trade. The earliest evidence is mainly archaeological and comes from Babylon and the early Middle Eastern and Mediterranean empires (Casson and Lee 2011). From thereon, markets spread to Europe. Substantial documentation survived from the eleventh century onward, when towns with markets were established across Western Europe. Marketplaces were located at centers of consumption and transportation hubs, as well as close to religious institutions and locations that attracted considerable crowds of people (Casson and Lee 2011).
Markets can be either formal or informal. Formal markets are marked by transparent transactions, governed regulations, and clear opening hours. Trust between transactors is based upon trust in the system, rather than personal relationships. In contrast, an informal market can be based at any convenient place, such as the street corner or the doorstep, and tends to be small and dependent on personal trust (Casson and Lee 2011).
Between the twelfth and fourteenth century, a rapid expansion of formal markets for local products was complemented by a similar growth in the number of fairs providing outlets for longer distance and higher-value trade (Casson and Lee 2011). Fairs were normally held on an annual basis and also served as social occasions. However, the importance of formal markets and fairs should not be overstated, as it has been suggested that during any part of the medieval period less than half of all commercial transactions passed through formal markets and fairs (Casson and Lee 2011).
This growth of markets continued steadily from the fifteenth through to the seventeenth century. There were periods of brisk expansion, related to the extension of credit and the growth of international and interregional trade, but there were periods of stagnation as well, due to wars, famines, and political instability (Casson and Lee 2011). Furthermore, newspapers began circulating in the seventeenth century, which represented an unprecedented platform connecting producers with their content users (Casson and Lee 2011).
Summary of Chapters
1 Introduction: Provides an overview of the platform business model, establishes the relevance of the thesis through market comparisons, and defines the research scope and methodology.
2 The Platform-based Business Model: Details the historical evolution of platforms, explores their core mechanisms like the "four pillars of transaction," and evaluates their rising importance in the modern economy.
3 Current Market Analysis of Platform-based Businesses: Conducts an empirical investigation into the market leaders and competitive landscapes in the US, China, and Russia across five technology sectors.
4 Cultural Analysis: Applies the Hofstede Model and GLOBE Study to provide a theoretical framework for comparing the societal values of China, Russia, and the United States.
5 Applying the Cultural Analysis to the Current Market Situation: Synthesizes the previous chapters by correlating cultural findings with market behavior and explaining factors for specific national expansion trends.
6 Discussion and Conclusion: Summarizes key research findings, answers the central research questions, and offers future predictions regarding the global trajectory of these platform economies.
7 Appendix: Defines key terminology used throughout the research to ensure clarity and conceptual understanding.
8 List of References: Documents all academic sources, reports, and statistical datasets utilized to support the thesis arguments.
Keywords
Platform-based Business, Cultural Differences, Market Analysis, Hofstede Model, GLOBE Study, Winner-takes-it-all, Network Effect, E-commerce, China, Russia, Digital Economy, Market Monopoly, Consumer Behavior, Business Strategy, Global Expansion
Frequently Asked Questions
What is the primary focus of this thesis?
This thesis examines the cultural factors that influence the development and expansion of platform-based business models in China and Russia, using the US market as a benchmark for comparison.
Which key thematic areas are addressed?
The research covers the historical evolution of marketplaces, the current competitive status of giant platform corporations, and an in-depth analysis of national culture using academic models.
What is the goal of this academic research?
The main goal is to identify why specific market imbalances exist between Chinese and Russian digital economies and how cultural variables contribute to these differences.
Which scientific methods are utilized?
The research relies on secondary source analysis, primarily conducting a thorough literature review of scientific papers, business reports, and digital datasets from sources like ScienceDirect, Statista, and Google Scholar.
What content is covered in the main section?
The main body investigates the transition from traditional markets to platform capitalism, the specific dominant players in various industries, and the application of Hofstede's and GLOBE's cultural dimensions to these business landscapes.
What are the characterizing keywords of the research?
The core subjects include platform-based businesses, cultural analysis (Hofstede/GLOBE), market monopolies, the network effect, and comparative economic study between China, Russia, and the USA.
Why is the Russian e-commerce market perceived as highly fragmented?
The research identifies several reasons for this, including a lack of necessary logistical infrastructure, insufficient government funding, and the high aversion to change (uncertainty avoidance) prevalent in the Russian population.
How does the "winner-takes-it-all" phenomenon differ between China and the US?
While both nations exhibit this dynamic, China tends to have more localized monopolies that are heavily influenced by national policy, whereas US firms frequently scale their dominance globally.
What role does the Chinese government play in platform success?
The thesis suggests that state policy and the restriction of foreign competitors have served as critical drivers in allowing national champions like Baidu to solidify their dominance within the country.
- Arbeit zitieren
- Jakob Reisinger (Autor:in), 2022, The Cultural Differences of Expanding Platform-based Businesses in China and Russia, München, GRIN Verlag, https://www.grin.com/document/1288346
