Instagram is a module of the Meta (Facebook) digital platform ecosystem
It is a hybrid platform because it contains both features of the transactional platform and innovative platform.
Platform plays role of marketplace, captures value by charging for advertising and opens their application programming interfaces (APIs) to encourage third parties to create complementary apps and services (Facebook for Developers)
Players: consumers of content with heterogeneous and often changing
preferences and needs (demand side)
producers of content: (users and companies- supply-side) companies publish ad and users create content for other users
provider and sponsor is Meta
Supplier Power - low:
Even though there are a large number of companies offering services. There are only a few reputed suppliers for a large range of hardware and software supplies.
The threat of New Entrants - moderate to low:
The potential for new entrants in the industry is moderate to low, despite low barriers to entry: Any new player will require significant investment ->establish itself and grab market share and need time to develop a loyal customer base.
The threat of Substitutes and Current Competitors are indicated as high high:
Instagram has many substitute products: Facebook, Tik-Tok, Twitter, Snapchat, Pinterest. Moreover, Instagram faces competition from regional social networking platforms, such as QQ and WeChat in China with 877 and 846 million users respectively.
Buyer Power is high:
intense competition( buyers are left with many choices). No switching cost.
The second buyer is advertisers, they will also shift away to other social media (if Facebook raises the ad prices).
Instagram is a module of the Meta (Facebook) digital
platform
ecosystem
It is a hybrid
platform
because
it contains both features of the transactional
platform
and innovative platform.
Platform plays role of marketplace, captures value by charging for advertising and opens their application programming interfaces (APIs) to encourage third parties to create complementary apps and services (Facebook for Developers)
Players: consumers of content with heterogeneous and
often
changing
preferences and needs (demand side)
producers of content: (users and
companies
- supply-side)
companies
publish ad and users create content for other users
provider and sponsor is Meta
Supplier Power
-
low:
Even though
there are
a large number of
companies
offering services. There are
only
a few reputed suppliers for a large range of hardware and software supplies.
The threat of New Entrants
-
moderate to low:
The potential for new entrants in the industry is moderate to low, despite low barriers to entry: Any new player will require significant investment
->
establish itself and grab market share and need time to develop a loyal customer base.
The
threat of Substitutes and
Current
Competitors
are indicated
as
high high
:
Instagram has
many
substitute products: Facebook,
Tik-Tok
, Twitter, Snapchat, Pinterest.
Moreover
, Instagram faces competition from regional social networking
platforms
, such as
QQ
and WeChat in China with 877 and 846 million users
respectively
.
Buyer Power is high:
intense
competition
(
buyers are
left
with
many
choices). No switching cost.
The second buyer is advertisers, they will
also
shift away to other social media (if Facebook raises the ad prices).