Business Ecosystems

New perspective on value co-creation in network structures

 

Value Chain

The information value chain (1) reveals changes due to digitalization

 

Digitalization leads to decreasing transaction costs and promotes network structures i.e. business ecosystems.


Decreasing marginal costs

Decreasing marginal costs due to ever cheaper storage or computing power leads to more innovation, faster time-to-market as well as new business models. While existing processes or services are improved, completely new processes or services will be created as well.

 

Decreasing transaction costs

Decreasing transaction costs lead to dissolving company boundaries, since modern information and communication technology provides cheap and easy-to-use possibilities to transfer information or values (i.e. APIs). Ultimately, this promotes the emergence of business ecosystems with multiple different actors.

"Business Ecosystems are dynamically evolving communities of interdependent social and economic actors which interact through coordinated technologies, norms and rules to co-create and co-capture value in relation to a shared purpose permitting the alignment of their individual goals."

- M. Burkhalter (CC Ecosystems)

Definition of business ecosystems


Dynamically evolving communities

Actors within a business ecosystem offer specific capabilities that can be used to complement a value creation process involving various actors. As their capabilities might change over time, so does the ecosystem.


Shared purpose

The shared purpose functions as a mutual reference point that manifests itself as a concrete product or service (i.e. mobility, while the concrete service might be a ride on the train).


Interdependent social and economic actors

Business ecosystems describe various autonomous agents (or groups of agents) that pursue their own goals and needs and who participate in the business ecosystem in order to fulfill them.


Coordinated technologies, norms and rules

In order for the ecosystem to function, the actors use a shared set of norms and rules and leverage a shared technology that supports their interactions around the shared value purpose.


Co-create and co-capture value

Each actor contributes to the value creation process, however, only as long as each actor is able to capture a fraction of value for himself will he participate in the ecosystem.

 

Roles within the business ecosystems

Roles

There are four archetypes of actors within a business ecosystem who work together to co-create and co-capture value.

 

Designig ecosystems based on services

benefits

Benefits of applying business ecosystem thinking


The service offering method can be used to design Ecosystems and to show the development mechanisms. 

 

Method for the design of an Ecosystem service offering

  • Development of Ecosystem offerings around a central primary service (co-creation with various actors)
  • Successive integration of further contextually fitting and profitable services
  • High transparency with regard to possible complementary services
  • Conceptual framework and design support for an ecosystem offering (creative process)

 

Combining the service perspective and the allocentric business model perspective

The business ecosystem perspective offers a strong analytical perspective – nevertheless fundamental misconceptions persist.

 

Common misconceptions about business ecosystems:

“Our company wants to build/ buy an ecosystem”

  • Business ecosystems emerge around a shared purpose
  • A company can only try to access or develop an ecosystem, however the evolvement is a highly interdependent, game theoretical process
  • It cannot be bought as it describes intra-organizational relationships

“While others offer a single service, we can offer a whole ecosystem”

  • A business ecosystem is not a product or service
  • An ecosystem comprises compatible and complementary (partial) services which are orchestrated towards a useful and relevant whole
  • The new service is configured by leveraging information from all actors

“The ecosystem belongs to single company like Apple / Amazon / Airbnb / Alibaba …”

  • Apple, Amazon, Airbnb, Alibaba, etc. are platform companies
  • They perform an orchestration role and foster the exchange and development of digital-enabled services between the actors, they don’t own the ecosystem
  • Due to their size, they can often establish quasi-monopols

“The platform is equal to the ecosystem”

  • The platform provides the transactional infrastructure for the network
  • While the infrastructure is important (i.e. connecting owners and guests on the Airbnb platform) not every transaction or value flow has to be bound to the platform (i.e. access to apartment, information about the neighborhood)

“Ecosystem is just a fancy word for market place”

  • While Amazon or Alibaba are examples for platform companies that enable market places, the ecosystem describes the structure of the relationships
  • The price mechanism is the single source of coordination in markets, while ecosystems offer more options regarding coordination and transfer of services

 

 

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