What is a Business Ecosystem ?

By Morad O. Mouhsine

Université de Nice Sophia-AntipolisLaboratoire GREDEG - CNRS

250 Rue Albert Einstein 06560 Valbonne, France

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• PhD research in strategic management in Laboratoire GREDEG - CNRS in Sophia Antipolis, France.

• Research Director: Laurence SAGLIETTO, Université de Nice Sophia Antipolis

• Theme: Business Ecosystems

Context

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Seeking inspiration in NatureThere is a long history of economists and management scholars seeking inspiration in nature in order to explain the structure of business networks and their dynamics.

Studies on ants, bees can help identify similarities with human organization of labor, crowd behavior...

Toyota studied the legs of cockroaches to improve the steering systems of its recent cars...

A management consultant decided to learn more about natural ecosystems...

...and draw lessons for the business world.

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The concept of BE takes its roots in ecology

It is the systems so formed which, from the point of view of the ecologist, are the basic units of nature on the face of the earth (...) These ecosystems, as we may call them, are of the most various kinds and sizes.

“”

Arthur G Tansley (1935)“The use and abuse of vegetational concepts and terms”

Origins of Business Ecosystems

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Natural ecosystems consist of heterogeneous species sharing and/or competing for limited resources. In natural ecosystems members co-evolve and develop, therefore strengthening the whole ecosystem.

For instance, if one species is weakened or disappears, it results in the entire ecosystem being affected: it may be better off or, inversely, in danger of collapse.

Natural Ecosystems

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The Metaphor

There are lessons to be learned from natural ecosystems structure and dynamics, especially in the field of strategic management.

Natural ecosystem

Business ecosystem

analogical thinking

limits of the analogyTansley (1935) Moore (1993)

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Origins of Business Ecosystems (BEs)

James Moore, “Predators and Preys: A new ecology of competition”, Harvard Business Review

I suggest that a company be viewed not as a member of a single industry but as part of a business ecosystem that crosses a variety of industries. In a business ecosystem, companies coevolve capabilities around a new innovation: they work cooperatively and competitively to support new products, satisfy customer needs, and eventually incorporate the next round of innovations.

1993

1996

“”

Business Ecosystems defined

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A BE is an original type of business network.

With a specific structure.

And specific dynamics.

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Structure of Business Ecosystems

• The main point about the structure of a BE is the diversity of actors.

• Actors can be organizations, individuals or groups of individuals, operating on profit or non-profit logics, governmental or non-governmental, etc.

• A BE is usually organized around one or more leaders.

• The leader(s)’ role is to align the resource & competence complementarities between the actors of the BE with an innovation agenda that inspires them all.

• In a BE, different actors play different roles. Businesses can either be keystones, dominators, or niche players.

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Dynamics of BEs include...

• Coopetition: alternative moments of cooperation and competition between actors within the BE.

• Co-evolution: the dynamics by which different actors evolve together with other actors thanks to the relationships they foster with each others.

• Leadership: one or more actors inspire the whole community and set the direction for the years to come.

• Leaders emerge, they are not appointed.

• Leadership changes overtime. IBM created and led the PC ecosystem around hardware until Microsoft and Intel took its leadership and developed it dramatically around software.

• Leaders could be non-business organizations or governmental institutions. It depends on the BE...

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Dynamics of BEs include...

• Innovation: actors in a BE innovate individually, in small groups or altogether. Innovations can be products/services, ideas/values, organizational forms, work processes...

• Shakeouts: such as financial crisis, natural disasters, new players, radical innovations... Shakeouts survival is a strong indicator of the health of the BE.

• Creation of niches: such as the electric car in the automotive industry. It is also an indicator of the health of the BE.

2004

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Famous Business Ecosystems

I-tunes platform and its leader, Apple

Amazon Web Services and its leader Amazon

The PC industry and its leaders Microsoft and Intel

but also

Premium quality coffee production, led by IllyCaffé

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The bigger the BE the more complex the relationships

between actors

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TTechnology

A

I

CAccessChannel

Interest

BusinessAssetsCompaniesHW, devices, gadgets, screens

UI, Usability, accessibility, visualization, Interface to Interest (I2I)

Down

Trend

UpTrend

Down

Trend

UpTrend

Operators

Print media, web media

CommunitiesSearch

CableTV

Media

data sort/filter engine, search provider, w

alled-garden-door-key

content, people, ideas, literature, music, films, art, hobbies, culture, civilization,

history, stories, drama

cabl

es, p

ipel

ines

, ne

twor

ks, c

harg

ing

& b

illin

g se

rvic

es,

clou

d, t

ie-in

sal

es, p

oint

s-of

-sal

es

Trend DownUpMarket

TAIC SIMO modelJuhani Risku

2011

MIST UI+

Systemic products+

TAIC ecosystem

BusinessIdeal

Model

2011

Blogs

Mobile phones

Vodafone

Telefonica

Orange

China Mobile

T MobileFacebook

Gowalla

Twitter

MySpace

LinkedIn

Google

YouTube

Social networking

Microblogging

Tablets, e-booksPads, laptops, PCs, TV

News Corp.

SonySonyEricsson

LG

HTC

SamsungRIM ZTEHuawei

Android

AppleNokia+Microsoft

Amazon

Walt DisneyTime WarnerViacom

CBS

Skype

Mashable

HuffingtonTechCrunch

EngadgetGizmodo

InternetOperator

Screen

Media

Apple ruleshorizontally

SIMO – TAIC models

Entertainment reservoirSoftware reservoir

Black Horse reservoir

Technology – Access – Interest – ChannelTAIC – SIMO business model

Juhani Risku 2011Screen – Internet – Media – Operator

Technology reservoir Screen – Internet – Media – Operator Technology – Access – Interest – ChannelSIMO business model

TAIC business model

BEs are usually vast, complex networks

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But it depends on the frontiers that you set to analyze the activity...

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Because, yes, “business ecosystem” is also a perspective...

...powered by a paradigm shift.

We don’t think anymore in terms of “our organization’s strategy vs our competitors’...”

but rather in terms ofour business ecosystem’s strategy vs

competing business ecosystems’

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Many questions arise

• What does each member individually contribute to the survival and development of the BE ?

• Who are the key actors in the BE and why ?

• What type of innovation does the BE produce ? how ?

• Are the actors of a BE conscious of their belonging to the BE in question ? does it make any difference in their day-to-day activities ?

• What are the factors that can threaten the BE ?

• How do actors from different “species” work together (for the good of the BE) ?

• Who is the competition ? for whom ? and how ?

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What are the determinants of the longevity of a business ecosystem?

My doctoral research in strategic management

More specifically, I am looking at the links between elements of structure and dynamics of a BE in order to suggest a “model” of BE longevity.

“”

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I suggest that basket-ball be viewed as an original type of BE

Women professional basket-ball in France

is the field of investigation.19Monday, July 8, 13

Why basket-ball ?

Because it displays all the characteristics of a Business Ecosystem

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Because it seems to be an original case of Business Ecosystem

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Because competition is a key element in (and outside) basket-ball...

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Qualitative Research

Interviews of more than 20 different actors of the French Women Basket-Ball Ecosystem

1. Actors of women pro basketball in FranceII. Longevity of the French Women BE

Themes2months of interviews6

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First Results in September 2013...

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Please send your questions and comments to:

Morad-Otmane.Mouhsine@gredeg.cnrs.fr

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