Business Ecosystems can transform a company’s value chain

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Business Ecosystems can transform a company’s value chain

From value chain to value networks, Digitalisation and e-Commerce are the cause of the striking decline in transaction cost and sales, as it is fading boundaries among industries and individual organisations.

What is a Business Ecosystem?

Business Ecosystems are three or more organisations interconnecting as equals to share value propositions and generate service-offerings no partaker could do it alone, and designed to better an organisation’s value chain into a value network of multiple partners.  A Business Ecosystem takes a different aspect of every organisation since each one shows the requirements of a particular group of customers.

Opportunities for an organisation to grow alone are currently limited, if not exhausted, as many businesses-innovation endeavours stick to long-standing industry logic, which frequently indicates restraints for a proposal, all the more so if they come across an organisation incubator.

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Accelerators and Incubators

Why not build Business Ecosystems collaborating with start-ups from the accelerator set up in the incubator, with start-ups as the power partner? Doing so in a completely different way would make it possible to use the benefits of the current start-up proposal.

When a Business Ecosystem engages in a value proposition, the dynamic is not the same, as an exceptional benefit materialises for the broader business.  Accelerators and Incubators are the space where growth and innovation can happen through high-performance to meet specific customer’s requirements. In the future, Business Ecosystems will be diverse and smoothly flowing among organisations of different sizes and natures.

A Business Ecosystem is, for example, an automotive manufacturer looking to start a business of private and public mobility by teaming up with a current-online platform and an insurance organisation to build up and put into operation latest business concepts.

In this example, the Original Equipment Manufacturer (OEM) and the insurance firm are probably large corporations, and the platform operator is likely a start-up. Even so, the partakers operate together on a barely-outlined project as if they were equals, with one business entitled as an orchestrator.

Concepts revealing successful value networks:

·       Count on a well-defined value proposal to operate as the centre of value proposition in coming years.

·       Does this way out require more than two partners?

·       Define the possible risks stakeholders might confront.

·       Is there a cost-benefit for all partakers that justifies the risk, and the transaction costs earnt by the orchestrator?

Taking the risk

Taking risks encompasses entrepreneurial-risk, elevated investment in management and mutual independencies. Recommendations are that corporations take the function of the orchestrator and perform as a complement when dealing with risks. They must also take part in several ecosystems to diminish the possible threat of a breakdown in a particular interconnected-system.

Whether the Business Ecosystem performs well, interconnected-participant firms and start-ups will generate concerted-efforts, not achievable just years ago.

Summing up: an effective ecosystem will facilitate an interchange of goods, services, viewpoints, or data in a propositional way, including operational procedures to sharing benefits among participants. Such an ecosystem can expand offerings, drive innovation, new ideas, and improve revenue and growth as well.

Your business needs to count on the attractive-effective leader, skilled enough as to be capable of innovating, and technology-oriented to better match to other companies’ capabilities.

Do you consider your business a worthy-ecosystem partner?

Dave Food

Prophetic Technology

M: +44 7775 861863

Photo credit: Unsplash

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