Business Ecosystem
A business ecosystem is the network of organizations—The idea is that each entity in the ecosystem affects and is affected by the others, creating a constantly evolving relationship in which each entity must be flexible and adaptable in order to survive as in a biological ecosystem.
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Ecosystem is a network
A business ecosystem is the network of organizations—including suppliers, distributors, customers, competitors, government agencies, and so on—involved in the delivery of a specific product or service through both competition and cooperation.
Constantly evolving relationship
The idea is that each entity in the ecosystem affects and is affected by the others, creating a constantly evolving relationship in which each entity must be flexible and adaptable in order to survive, as in a biological ecosystem.
Understanding a Business Ecosystem
Business strategist James Moore adopted this biological concept in his 1993 Harvard Business Review article "Predators and Prey: A New Ecology of Competition", in which he paralleled companies operating in the increasingly interconnected world of commerce to a community of organisms adapting and evolving to survive. Moore suggested that a company be viewed not as a single firm in an industry, but as a member of a business ecosystem with participants spanning across multiple industries.
In effect, the business ecosystem consists of a network of interlinked companies that dynamically interact with each other through competition and cooperation to grow sales and survive. An ecosystem includes suppliers, distributors, consumers, government, processes, products, and competitors. When an ecosystem thrives, it means that the participants have developed patterns of behavior that streamline the flow of ideas, talent, and capital throughout the system.
Ecosystems and Competition
Ecosystems create strong barriers to entry for new competition, as potential entrants not only have to duplicate or better the core product, but they must also compete against the entire system of independent complementing businesses and suppliers that form the network.
Being a part of a business ecosystem provides mechanisms to leverage technology, achieve excellence in research and business competence, and compete effectively against other companies. Some other goals of a business ecosystem include:
Driving new collaborations to address rising social and environmental challenges
Harnessing creativity and innovation to lower the cost of production or allow members to reach new customers
Accelerating the learning process to effectively collaborate and share insights, skills, expertise, and knowledge
Creating new ways to address fundamental human needs and desires