What Is a Business Ecosystem?
A business ecosystem consists of organizations like suppliers, customers, distributors, other businesses, and the like. These elements make up a product or service in the long run alongside competition and teamwork. Each aspect affects the other positively or negatively. They must be able to co-exist and adapt to survive.
Why the term ecosystem?
In biology, we describe an ecosystem as a geographic area where biotic factors (living things) like plants and animals interact with abiotic factors (non-living things) like rocks and temperature to form a bubble of life.
In business, we can use this analogy. Companies, competitors, consumers, and other elements make up a community where they evolve and strive. Businesses and companies compete to survive. They either adapt or go extinct.
The analogy used to compare business into an ecosystem helps each element in the business ecosystem thrive regardless of changing times.
In 1993, James Moore, a business strategist, embraced this analogy in his business review article entitled Predators and Prey: A New Ecology of Competition in Harvard.
In Moore’s article, he said that the interaction of the organisms in the business world is organizations and individuals support an economic community. This community provides products and services to customers who are also community members with producers, suppliers, stakeholders, and even competitors. After some time, one or few significant companies set directions that these community members eventually follow. These leaders may not be permanent; however, members will always value leadership.
More on business ecosystems
Business ecosystems are companies that compete and cooperate to generate sales and survive. When there is a new competitor, older businesses tend to impose strict barriers to entry. How? New competitors need to match or even surpass the product or service offered in the market.
Listed below are the dimensions of a business ecosystem:
- Strategy. There are many business ecosystems. Each of them is connected and dynamic. They must look for a method to strive and survive.
- Openness. Strategies and common goals impact the transparency of an ecosystem. It is usual for organizations to involve with ecosystems regardless if they are public, private, or hybrid.
- Diversity of participants. There will always be changes in an ecosystem, so organizations should step up their game with more knowledge and intelligence.
- Relationship types. In the modern world, social media and other digital platforms made it easier to maintain a relationship.
- Exchange of value. The value may not always pertain to money; sometimes, it can be services, reputation information, or other non-monetary things.
- Diversity of industries. When an ecosystem expands, unexpected partnerships may occur.
- Complexity. Identifying flaws and acknowledging implications and constraints lead to further understanding of ecosystem interactions.
- Technology. Integration of technology, information, and processes are some of the requirements for success.
Business ecosystem goals
Listed below are some goals of business ecosystems in a dynamic world of commerce. It may either create its very own ecosystem or look for ways to merge with an existing ecosystem.
- Collaborations. These help companies and businesses manage different challenges.
- Honing of skills. Companies need skills and determination to have lower expenses or gain new customers.
- Creativity. A business should be aware of and satisfy its customer’s needs and wants.