Business Ecosystem

Business Ecosystem

What is a business ecosystem?

A business ecosystem is the network of organizations (including suppliers, distributors, customers, competitors, government agencies, etc.) involved in the delivery of a specific product or service by the competition and cooperation. The idea is that each entity in the ecosystem affects and is affected by the others, creating an ever-changing relationship in which each entity must be flexible and adaptable to survive as in a biological ecosystem.

Like natural ecosystems, companies involved in commercial ecosystems compete for survival with adaptation and sometimes extinction.

Key points to remember

  • A business ecosystem is the network of organizations (including suppliers, distributors, customers, competitors, government agencies, etc.) involved in the delivery of a specific product or service by the competition and cooperation.
  • The idea is that each entity in the ecosystem affects and is affected by the others, creating an ever-changing relationship in which each entity must be flexible and adaptable to survive, as in a biological ecosystem.
  • Ecosystems create strong barriers to entry for new competition.

Understanding business ecosystems

In the 1930s, British botanist Arthur Tansley introduced the term ecosystem describe a community of organisms interacting with each other and with their environment – air, water, land, etc. In order to thrive, these organizations compete and collaborate with one another on available resources, co-evolve and adapt jointly to external disturbances.

Business strategist James Moore adopted this biological concept in his 1993 article in the Harvard Business Review “Predators and Prey: A New Ecology of Competition”, in which he compared companies operating in the increasingly commercial world more interconnected with a community of organisms adapting and evolving to survive. . Moore suggested that a company be viewed not as a single company in an industry, but as a member of a business ecosystem with participants spanning multiple industries.

Advances in technology and increasing globalization have changed ideas about the best ways to do business, and the idea of ​​a business ecosystem is supposed to help companies understand how to thrive in this rapidly changing environment. Moore defined the business ecosystem as follows:

An economic community supported by a foundation of interacting organizations and individuals – organizations in the business world. The economic community produces valuable goods and services for customers, themselves members of the ecosystem. Member organizations also include suppliers, primary producers, competitors and other stakeholders. Over time, they co-evolve their capacities and roles and tend to align themselves with the orientations defined by one or more central companies. Businesses in leadership positions can change over time, but the ecosystem leadership role is appreciated by the community because it allows members to move towards shared visions to align their investments and find leadership roles. mutual support.

Indeed, the business ecosystem is made up of a network of interconnected companies that interact dynamically with each other through competition and cooperation to increase sales and survive. An ecosystem includes suppliers, distributors, consumers, government, processes, products and competitors. When an ecosystem thrives, it means that participants have developed patterns of behavior that streamline the flow of ideas, talent and capital through the system.

Ecosystems and competition

Ecosystems create strong barriers to entry for new competition, as potential entrants must not only duplicate or improve the commodity, but they must also compete with the entire system of businesses and independent complementary suppliers that form the network. Being part of a business ecosystem provides mechanisms to leverage technology, achieve research excellence and business competence, and compete effectively with other companies. Some other objectives of a business ecosystem include:

  • Stimulate new collaborations to meet growing social and environmental challenges
  • Harness creativity and innovation to reduce production costs or allow members to reach new customers
  • Speed ​​up the learning process to collaborate and effectively share ideas, skills, expertise and knowledge
  • Create new ways to meet basic human needs and wants

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