Parallelism Between Industries and Digital Ecosystem

To grasp what makes digital ecosystems unique and how they could affect competitive strategy, it’s helpful to first recognize certain similarities between the generic construct of ecosystems based on conventional business interdependencies and industries and the digital ecosystems. Interdependencies, which epitomize the current construct of digital ecosystems, are not a new concept for businesses, therefore parallels are to be expected. Indeed, competing in industries demands managing a plethora of interdependencies, which companies have historically done through their value chains.

How To Create an Ecosystem Strategy?

Digital Ecosystem Strategies and Principles of Ecosystem sub

1. Identify The Ecosystems in Which Your Company Must Play a Part:

Analyze your present business — what you do, who your partners and customers are, and where the dangers and opportunities are arising. Create visual models to demonstrate how your activities fit within current and future digital ecosystems. These models should identify the stakeholders you’re working with, the value propositions they offer, and the value exchanges of commodities, services, money, credits, information, and intangibles.

2. Determine Which Roles You Should Play in Relevant Ecosystems:

Create ecosystem models, incorporating current ecosystems and where you fit in, as well as ecosystems where you can have a huge impact. Define the value propositions, key interactions, ecosystem players, situations that might hasten change, and roadblocks.

A corporation must have or construct, a platform that causes massive network effects to be an ecosystem orchestrator. This necessitates a focus on a key interaction that draws stakeholders to your platform in the first place. The engagement for Uber, for example, was between passengers seeking drivers. Your business can then provide more interactions.

Similarly, a corporation can expand and monetize its products as a modular producer without the added hurdles of organizing the interactions of third parties as well. Such monetization might involve developing data services based on market or client knowledge. It has the ability to transform those insights into consumable goods.

Furthermore, businesses must build a solid application programming interface strategy so that ecosystem stakeholders may connect to its data automatically via the internet. A corporation, for example, can act as an orchestrator in one ecosystem and as a producer in another.

3. Determine How to Monetize Your Role in The Ecosystem:

Examine your key competencies to see if you have any assets that you haven’t been able to monetize in the past but could now in an ecosystem. Consider how you might be able to add value to such assets. An ecosystem modeling exercise enables a company to describe how it derives value from its engagement.

Principles of Ecosystem

Many businesses utilize common frameworks to select which new income streams to explore while pursuing ecosystem strategies. As a result, they only look at the apparent connections. However, in the ever-evolving world of Ecosystem 2.0, a comprehensive strategy driven by the following three ideas is required:

1. Use Strategic Mapping to Detect Control Points:

A top-down view of the possible breadth of influence, as well as a nuanced strategy meant to nurture diverse activities by the many stakeholders involved in an ecosystem, are the foundations of holistic ecosystem strategies. Whether you’re organizing or participating in an ecosystem, the first step is to map the horizontal and vertical dimensions of the vast ecosystem in which you operate or want to participate against your present firm. The map will highlight “control spots”, or locations on the map where the organization might have the most effect on the value chain by installing or recruiting the proper skills.

The map will also show you how far away your company is from these checkpoints. Companies that are getting closer to a control point may want to create an ecosystem around it. If they find themselves further away, they may try to get closer or opt to join ecosystems built by more natural owners of a specific control point.

In general, control points are the optimum places to install capabilities to alleviate pain points and streamline the path of customers’ trips. Mastery of one or more of these control points lays the groundwork for horizontal and vertical expansions that may catapult your organization into new markets, new customer and business partner groups, and even new enterprises.

2. Lock-In Impact with Precise Resources:

Mapping is a method of forcing control points to be prioritized. Companies that wish to get benefit from the control points they’ve identified must first build and recruit the necessary competencies.

To do so, businesses may need to rethink and modify current capabilities, or they may need to seek out partners who can fill in the gaps. Advanced digital skills such as AI, functional know-how such as digital marketing, high-level supply-chain, and logistics skills, and innovation capabilities to boost the value of products and services are all components that incumbents frequently lack. As previously said, IT firms have made it simpler than ever for incumbents to locate suitable partners to supply digital expertise.

3. Design The Organization for Numerous Customers:

Successful ecosystems are built to generate market gains and value for all stakeholders. That is, without a doubt, what investors want to see. Companies that want to orchestrate or participate in ecosystems, on the other hand, must balance a complex set of challenges both within and outside their own walls. Internally, they need to figure out the best organizational structure.

Conclusion

Future research might uncover, explore, and examine further implications of digital ecosystems for competitive strategy. One such issue concerns the mechanisms involved in ecological “digitization.” Firms undoubtedly have a role in digitizing value chains and establishing industrial ecosystems. In this case, the procedure entails digitizing existing ecosystems (or value chain interdependencies). Interdependencies exist outside of existing value chains in consumption ecosystems, on the other hand.

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The Enterprise Diary is distinctively focuses on five major industries i.e Technology, Healthcare, Finance, Manufacturing and Consulting.

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