BUSINESS ECOSYSTEM 101: CREATING FERTILE SOIL FOR BUSINESS GROWTH
Developing fertile environments within business industries is crucial for the growth of the economy as well as building up communities to become thriving places for commerce. But what does it take to build a business ecosystem?
Firstly, let’s look at who will participate in the business ecosystem? Like a biological ecosystem, business ecosystems are made up of different components that interact with each other to create the system. These ecosystems can have a macro or micro perspective. From a macro perspective, we consider how businesses participate on a country or industry level and a micro perspective looks at how a business operates as a company. This can further be divided up into global and local levels.
According to Harvard Professor, Marco Iansiti, a business ecosystem consists of companies to which you outsource business functions, financing institutions, technology companies, and makers of complementary products which are used in conjunction with your product. This ecosystem may also include customers and competitors if they have an impact on your business through feedback and their actions. Furthermore, the media and regulatory bodies may have an impact on how you conduct your business.
By participating in an ecosystem, you will become aware of certain needs and wants in your industry. You will have access to a broad scope of customers. You can build new products and services. You can focus on what you are good at and outsource other sections of your business to other people who are experts in those areas. You can educate your audience and you can deal with regulatory bodies easier.
Business ecosystems help the flow of talent, ideas, and capital to move and grow well in the system. For this to be a success, the business whether complementary or competitive needs to create more value for the end user than they would alone. Secondly, the businesses must move in unity with one another and be orchestrated in a way that brings value to the end user. Not everyone can be the lead in the business ecosystem but those who participate in the system must acknowledge the lead company and understand that the lead company could move to other companies in the system. Finally, the pie which all the businesses are looking to serve needs to be allocated fairly to each entity that participates in the business ecosystem.
When working towards creating a business ecosystem there are three items to consider
Here you will consider what are the advantages of creating a business ecosystem. How the partnerships with other businesses will add value to your offering and what markets will you be serving.
Next, you need to consider who you will invite into your business ecosystem. You must also consider what assets they bring and how easy it will be to work with them.
Will the business ecosystem be organised by one company, or will it be self-regulating?
After you have considered these three items, then you will need to look at how you will grow the ecosystem and how the equity will be split in the ecosystem.
By creating healthy ecosystems where businesses thrive and feed back into the community, you can create places where everyone reaps the benefits of healthy businesses.
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