For every Google or Tencent that is hugely profitable, there is a Spotify, a WeWork, or an Uber that continues to lose money. But regardless of how successful they prove to be, it’s important to understand that they are playing by a different set of strategy rules than traditional firms.
Why are business ecosystems suddenly such a hot topic? It’s not as though they’re a new idea. The term “ecosystem” has been used in business for 20 years. Companies including Volkswagen and Toyota have been orchestrating huge networks of suppliers and distributors for more than 50 years. Lloyd’s of London, the insurance marketplace, is a classic ecosystem and was founded in the 17th century.
What’s changed is that most of today’s fastest-growing companies — from Amazon and Google, to Alibaba and Tencent, to Uber and WeWork — are explicitly positioning themselves as ecosystem players, as hubs within networks of customers, suppliers, and producers of complementary services. Industry observers and regulators are looking on with interest and concern. They want to understand if these companies have developed a new way of competing that might challenge the conventional view of how businesses create and capture value.
by Julian Birkinshaw
Read more : Ecosystem Businesses Are Changing the Rules of Strategy