The food delivery platform Wolt was founded in 2014 inHelsinki, Finland, and recently launched in Germany in 2020. Whilethe website and app are best known in Germany for delivering foodfrom the platform's restaurants, they also offer other merchandisedelivery or click & collect, such as for groceries or cosmeticsfrom selected shops in some other countries.

a) 8 Points

Arguably, one reason for Wolt’s growth and successiveexpansion are network effects. Please provide adefinition for goods that are subject to networkeffects (1 point).

Describe and differentiatedifferent types of network effects integrating anexample of your choice (5 points). Please alsoprovide an example for network effects occurringon Wolt’s platform (2 points).

b)

In the lecture, we differentiated between different types ofbusiness platforms. Please state andexplain differences between these businessplatform types in terms of participants, objectives, and design (5points).

Discuss which platform type Woltcorresponds to (5 points

c) 30 Points

In the lecture, we have talked about transaction costs andintermediaries in information markets. First, pleasedefine transaction costs (1 point).

State and explain allpossibilities for Wolt to reduce transaction costs in thefood delivery market. For each possibility, provide anexample in relation to Wolt (14 points).

Explain how transaction costs influenceintermediary functions and describe how theinternet and digital technologies have impacted transaction costsin digital markets (4 points).

Discuss why we have witnessed the entry of newintermediaries in many digital services in the past decade despitethe disintermediation hypothesis popular in the early days of theinternet (4 points).

Wolt’s exact financial indicators are not public;however, based on the numbers of one of its main competitors,Delivery Hero (see table below), it is very likely thatfood delivery as of now is not a profitable business. Year	2020	2019	2018	2017	2016
Results of ordinary business activity (in €)	-1,3 billion	-563,7 million	-220,2 million	-334,8 million	-202,3 million

d) 12 Points

The grocery delivery service Flink has raised moneyfrom investors for its expansion and is entering into a partnershipwith the Rewe Group - a physical retailer in Germany - forthe German market. Rewe exclusively suppliesFlink with groceries and secures a minority stake.

Name and explain the"chicken-egg" strategy used by Flink (1,5 points).

Further, explain three other possiblestrategies Flink could have applied and provide anexample of each for Flink (6 points).

Discuss why you think Flink hasdecided to enter a cooperation with Rewe and has not optedfor the alternative strategies (1,5 points).

In the lecture, you have learned about platform openness.Describe the two types of openness andprovide one example for each of the types ofplatform openness in regard to how Wolt and Flinkcould collaborate on opening their respective platforms for eachother (3 points).

Answer rating: 100% (QA)

a Definition Network effects The term network effect refers to any situation in which the value of a good product service or platform depends on the n... View the full answer