7. The Network: Managing the Ecosystem Flashcards
Innovation challenges in the automobile industry:
- Lightweight engineering
-Automated driving
-Drivetrain electrification
-Car connectivity
The network: Managing partnerships:
-Theory-Centric: Understand the transition from the resource-based view to the relational view of the firm
-Technology-Centric: Grasp the link between product architecture and network structure
-Customer-Centric: Uncover critical interdependencies within the network
-Process-Centric: Explore the role of network orchestration
Theory-Centric Perspective
Conceptual shift
-Resource-Based view of the firm: Firm consisting of multiple business units or subsidiaries but operating in
isolation, rent creation through resources possessed or controlled by the local firm
-Relational view of the firm: Firm being embedded in a network of relationships, rent creation through
resources shared between network members
Definition of relational rents:
Relational rents are supernormal profits jointly generated in an exchange relationship that cannot be generated by either firm in isolation
Sources of relational rents:
-Complementary resource endowments: Modularity of network, dual-network strategy
-Interfirm knowledge sharing routines: regular working group meetings and use of PLM system
-Interfirm relation-specific assets: Integrated development and manufacturing
-Effective interfirm governance: Dedicated network management function, clear contractual arrangements
Innovating in networks
-Opportunities
—-Access to external knowledge base (new-to-market)
—-Increase responsiveness to market changes (fit-to-market)
—-Sharing innovation risks and costs (cost-to-market)
—-Save time (time-to-market)
-Threats
—-Challenge existing capabilities and build new ones
—-Protect IP: Ensure exclusive control and use of new technology
—-Maintain control of the development process
—-Monitor costs within own firm
Technology-Centric Perspective
Main components of the StreetScooter:
Body, Exterior, Interior, Chassis and Safety Systems, Electronics, Thermal, Battery, Powertrain
Dual network strategy:
-Quality performers for components with high customer value
-Cost leaders for components with low impact on customer value
Customer-Centric Perspective
Definition of ecosystem:
The ecosystem is defined by the alignment structure of the multilateral set of partners that need to interact in order for a focal value proposition to materialize. When they work, ecosystems allow firms to create value that no single firm could have created alone.
Ecosystem concept ↔ network concept
-Unique role of members
-Interdependence between members
How does a network deliver value to the customer?
-Suppliers deliver components which form the product to the system integrator (e.g. Street scooter)
-In order for the product to work it needs also complements (e.g. fuel stations)
In an ecosystem, a customer can also provide the complements (e.g. DHL service and charging stations)
When redefining the target group, you have got two options
-Customers have to look for it himself
-Make own ecosystem available for new customers
Create ecosystem that is:
-As simple as possible
-As efficient as possible in delivering value proposition
Process-Centric Perspective
Critical network management processes:
-Knowledge mobility: knowledge needs to be available wherever it’s needed
→ Knowledge absorption, ecosystem identification, inter-firm socialization
—-Regular LEG meetings (lead engineering groups) → negotiation of specifications
—-Product lifecycle software: Smart (single source of information), connected (live operational data),
complete, flexible (tailored access to data)
-Value appropriability: Value created needs to be captured and distributed among members
→ trust, procedural justice, joint asset ownership
-Ecosystem stability: requirement for effective value extraction from collaborative activities
→ ecosystem reputation, anticipated future gains, multiplexity
