Chapter 1 - The concept of Business Ecosystems Flashcards
What does the acronym PESTEL stand for?
Political, Environment, Social, Technology, Ecological, Legal
What are the 5 threats that PESTEL help us understand?
Competitive Rivalry
Threat of new entrants
Threat from substitutes
Power of buyers
Power of suppliers
What is competitive rivalry?
Rivals drive down prices and force you to
improve quality to compete, driving up costs
What is Threats of New Entrants?
New entrants also drive down prices.
‘Barriers to entry’ are key.
What is Threat from substitutes?
Substitutes put a cap on prices and, again, can
drive quality improvements to stay competitive.
What is the power of buyers?
Powerful customers can negotiate lower prices
and higher quality
What is power of suppliers?
Powerful suppliers can insist on high prices,
driving up costs
What are you if you have low cost and a broad target?
Cost Leadership
What are you if you have high cost and a broad target?
Differentiation
What are you if you have low cost and a narrow target?
Cost + focus
What are you if you have high cost and narrow target?
Differentiation + focus
What are some examples of technologies driving change?
Social Media
The internet of things
Mobile Device
User interfaces
AI and machine learning
Big data and analytics
Cloud Technology
Bio and nano-technologies
Digital Assets
Bitcoin, cryptocurrencies
Blockchain
What is the ‘internet of things’?
Smart meters for gas and electricity
What does bio and non tech enable?
new products such as ‘wearable tech’
What can bitcoin and cryptocurrencies help with?
making secure payments without using banks
What are the typical areas of change with tech?
Rapid changes in customer expectations
New types of products and services
New business models
Market disruption
What types of environments are emerging technologies creating?
Connected and Open
Simple and intelligent
Fast and scalable
What is an ecosystem?
A complex web of interdependent enterprises and relationships aimed to create and allocate business value
What are two things that both ecosystems and traditional markets composed of?
Participants - the individual players or organisations
Interactions - the products or services exchanged among participants
What are the three components of participants?
Role (within the environment)
Reach (through the environment)
Capability (or key value proposition)
What are the three components of interactions?
Rules (or principles governing conduct within the environment)
Connections (of elements, such as data, knowledge or products)
Course (of interactions - speed and direction at which content or value is exchanged)
What are the defining characteristics of ecosystems?
Mutuality - ecosystems only exist because participants can deliver more value acting together for the mutual benefit
Orchestration - the coordination, management and arrangement of
complex environments, their participants and interactions.
What is value creation?
Bringing something of value into existence
What is value capture?
the act or process of appropriating or allocating value
What is value creation in traditional markets?
Value creation is incremental and focusses on covering costs and gaining returns
What is value capture in traditional markets?
Value capture is additive, sequential and based on
exchanges
What is value creation in Ecosystems?
Value creation is collaborative. Ecosystems create
more value as a whole, than the sum of individual
participants acting independently
What is value capture in ecosystems?
Value capture reflects a networked, dynamic,
everyone-to-everyone process of exchange
What is high complexity?
Barriers to entry are high and threat of new entrants is low. Roles are relatively secure/difficult to replicate
What is low complexity?
Barriers to entry are low and the threat of new entrants is high. Roles are vulnerable/easy to replicate.
What is tight orchestration?
Orchestrators have an ability to influence behaviour or actions across the entire ecosystem
What is loose orchestration?
No individual participant has significant influence across the ecosystem
If something has high complexity but loose orchestration what is it described as?
Hornet’s Nest
Fragmented Competition
If something has high complexity and tight orchestration what is it described as?
Lion’s Pride
Winner-take-all
If something has low complexity and loose orchestration what is it described as?
Shark Tank
Turbulent environment
If something has low complexity but tight orchestration what is it described as?
Wolf Pack
Collaboration
What are some of the challenges of regulating ecosystems?
Speed of changes
Innovators find ‘back doors’
Ecosystems evolve
Innovations cross lines of jurisdictions
What do digital customers want?
Contextualised interactions
Seamless experience across channels
Anytime, anywhere
Great service
Self service
Transparency
Peer reviews/advocacy
How do we keep ahead of customer expectations?
Design thinking e.g. designing experiences rather than products/services
Experiential pilots e.g. reactions, emotional and behavioural
Prototyping e.g. first generation product may only be 80% ready
Brand Atomization - The ability to tell multiple stories in many ways by producing content in pieces big and
small
