Business Ecosystems Essay

2458 Words Feb 23rd, 2011 10 Pages
1. Definition
Business Ecosystem is a strategic planning concept originated by James F. Moore . The basic definition appears in Moore's book, The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems, published in 1996. Moore proposed the following definition: “An economic community supported by a foundation of interacting organizations and individuals – the organisms of the business world. This economic community produces goods and services of value to customers, who are themselves members of the ecosystem.” Investopedia (2010) provides a simplified definition of business ecosystem; it is “the network of organizations – including suppliers, distributors, customers, competitors, government agencies and so on –
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Also, relationships are horizontal: following a determined sector or industry, relationships with competitors, or through substitutability and/or through competition and cooperation called “coopetition”. Companies may also have transversal relationships: where there is neither complementarity, nor direct substitutability but a common goal is pursued by the different business players or they are bounded by agreements between sectors. Organizations should also maintain intangible relationships whereby a common culture is set with well defined behavior standards but these relationships are informal and indirect. If these vertical, horizontal, transversal, and intangible relationships are maintained in a healthy way, this will lead to the creation of synergies between the different ecosystem participants.

4. Advantages
According to Malik (2010) “A well thought ecosystem is one of the most powerful competitive advantage, it brings:
“1. customers loyalty 2. differentiation from competition 3. increased revenues”
There are other advantages of business ecosystems as follows:
1) Greater value creation and delivery: Business ecosystems are born from value chains, they incorporate several value chains but they represent value webs rather than value chains. The network of organizations that belong to a business ecosystem create and deliver value to customers, partners, themselves and the whole community. Customers receive value from the whole business

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