Faculty of Commerce, Law and Management (ETDs)

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    Platform valuations in emerging markets: Industry specific network effects model
    (University of the Witwatersrand, Johannesburg, 2023) Mtini, Qhawekazi; Omane-Adjepong, Maurice
    Network effects are intangible assets that can create value in platform mediated businesses. Traditional accounting standards provide limitations to the ability to quantify the value created by these network effects, therefore, theoretical network effects laws, namely; Metcalfe’s, Sarnoff’s, Odlzyko’s and Reed’s laws are used as ‘rules of thumb’ to predict network value. Existing studies have largely verified the suitability of these rules of thumb by using data from developed markets with the use of overall company revenue as an indicator of the network value, albeit mixed conclusiveness and limited scope. In practice, Metcalfe’s law is the most popularly used and although business models and revenue generation differs across various industries, it is used regardless of the industry that the platform business operates in.This empirical study makes use of actual platform generated revenue and monthly active user base data from companies in the Asia Pacific emerging markets and across social network, e-commerce and search engine industries to test the suitability of Metcalfe’s law in emerging markets, regardless of industry. Theoretical value curves are derived using Metcalfe’s, Reed’s and Sarnoff’s laws to conduct a comparative test using curve fitting and the least squares method across the industries. The study finds that although Metcalfe’s law is the most suited for e-commerce and search engines; it is not the most suited regardless of industry as Sarnoff’s theory proves to be mostsuited for social networks. This proves that although Metcalfe’s law is suitable for use in emerging markets; in practice, there should be consideration of industry when selecting the most suited network effects rule of thumb to be used to predict the value of a network. In addition, the adjustment from using overall company revenue to platform generated revenue proves that using overall revenue for companies that generate revenue through platform and non-platform activities can result in the use of a network effects law that overestimates the value of the network, as seen in the instance of Tencent where Metcalfe’s Law was proven to be the best suited in the research by Madureira et al. (2013), Zhang et al. (2015) as well as Hove (2016). In this study the adjustment of revenue and improvement of the robustness of the model through use of quarterly data as opposed to annual data finds that Sarnoff’s Law is best suited for social networks.
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    Exploring the relevance of digital maturity factors in South African Businesses
    (2022) Mkhwanazi, Qoqanani
    Digital maturity in recent times has become topical in boardrooms around the world, including South Africa, with significant resources being directed into digital transformation. Various models created by academia and practice have identified numerous factors that are required but few exist on how digital maturity factors manifest in emerging and developing countries. This exploratory qualitative study therefore examines their relevance of those to South African businesses. Through semi-structured interviews with senior leaders across different industries it defines digital transformation and digital maturity as well as the dynamic capabilities that different businesses have developed to achieve it and an understanding of the relationship between the two concepts. The operational and conceptual definitions indicate digital maturity is an holistic organizational concept, thus, business looking to achieve it should develop dynamic capabilities throughout the organization, triggering wide transformation. This suggests that managers should intentionally build dynamic capabilities that address different maturity factors, with those found in the South African context not fundamentally different from those in models and in the developed world. However, importance was placed on what determined the success of digital maturity in a business, including external and internal factors. Government policies, regulation and legislation are vital in driving digital maturity and though models mainly look internally to improve it, the impact of external antecedents cannot be ignored.
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    The effect of vertical individualism on luxury purchase intentions: the moderating role of brand image
    (2020) Zici, Ayanda
    The consumption of luxury brands has grown significantly in emerging markets, particularly in Africa. These developments have resulted in marketers seeking to investigate the factors that influence purchase intentions for luxury brands, in order to develop brand communication strategies that will resonate with consumers and increase brand loyalty. There is, however, a lack of academic research in developing markets, such as South Africa, that reveal how individual consumer factors, like personal and social orientations, interact with each other to influence purchase intentions for luxury brands. The purpose of this study was to examine the relationship between vertical individualism and luxury purchase intentions. The study also examined the mediation effects of self-enhancement, materialism, value-expressive attitudes and symbolic benefits of brand image. The moderation effect of brand image was examined on value-expressive attitudes. An online survey questionnaire was conducted. 253 responses were obtained through voluntary sampling. Data was analysed using confirmatory factor analysis (CFA) and structural equation modelling (SEM) on Mplus. The results showed that vertical individualism does have a positive relationship with self-enhancement and materialism values. These values were found to have a positive influence on value-expressive attitudes. Materialism was shown to have a significant relationship with symbolic benefits of brand image. Brand image and value-expressive attitudes were shown to have a positive relationship with luxury purchase intentions. Brand image was found to have a moderation effect on value-expressive attitudes. It was recommended that future studies test the conceptual model in other emerging markets wherein luxury brand consumption is expected to rise in the foreseeable future, and include other variables.