Business decisions must be considered in an Ecosystem context
Corporations and startups, hidden champions and integrated conglomerates: In the future, business ecosystems will fundamentally change the mechanisms in the market. This development began many years ago: Apple, Uber or Amazon owe their success to such ecosystems, which would be inconceivable without platforms. But the platform – or the technology – is only one part of the story. Equally important, and therefore critical to success, is its strategic use through partnerships, cooperation, or investments.
But how do companies act intelligently and efficiently in business ecosystems? Which business models will lead the way to more growth in the future? How can they protect their core business from negative external influences and emerging competitors?
In cooperation with our strategic partner, Ecosystemizer and its founder Prof. Dr. Julian Kawohl (HTW Berlin) we strive to establish the perfect position for you within the business ecosystem – using scientific methodologies, strategic consulting expertise and substantial experience in projects revolving around ecosystem topics.
“With the Ecosystemizer toolbox we offer a structured approach to further develop strategies and business ideas together with our customers right until implementation.”
Ecosystemizer toolbox
Our business ecosystem value proposition for you
Making business decisions in an Ecosystem context
In business ecosystems and networks, companies can achieve joint value creation faster and more effectively than in classic, linearly structured value chains. This creates long-term value for all participants.
Companies can take on two different perspectives when operating within business ecosystems – either from protective or proactive viewpoints:
Growth strategies from new business models:
If the current business environment restricts and hinders economic growth, it is important to search for alternative approaches. What kind of new business areas are worth exploring and analyzing? What are the best measures when merging new business models with existing capabilities? What kind of mechanisms guarantee returns after implementing these new business models?
Protective strategies against disruptive threats to the core business:
When new market players, new products/solutions or new business models exert pressure on your own business, the need for action is unavoidable. What are the causes of this development, what mechanisms do new players use – and above all, how can your company take appropriate countermeasures?
In order to find the right answers – no matter if it concerns the avoidance of business risks or the exploitation of growth potentials and opportunities – we always analyze the entire business ecosystem holistically:
- What do new business models and disruption potentials look like, especially considering the human-centric view?
- What network effects can be leveraged to retain long-term success for existing platforms?
- What strategic partnerships and collaborations are possible to develop in order to thrive in the business ecosystem?
- What opportunities are available for monetizing crucial data within the ecosystem?
Our view of business ecosystems
- Increasing importance of ecosystems
- Differentiation between ecosystem and platform
- Life Areas and roles in the ecosystem
- The Strategy Map as a strategy tool
Increasing importance of ecosystems
Looking at history it is evident that product and service businesses were highly dominant players for many consecutive years. But with the turn of the century, which was only about 20 years ago, the digital revolution enabled platform approaches to become increasingly vital and relevant to future economic trends. The most recent business ecosystem developments will define the next evolutionary phase.
Consequently the topics concerning “Business ecosystems” are far from being marginal; quite the contrary: when looking at global market capitalization, the success of 7 of the 10 largest companies worldwide can be attributed to an active business ecosystem.
Differentiation between ecosystem and platform
While platforms do not necessarily need an ecosystem environment, conversely an ecosystem only works with a platform to build on – ecosystems can thus be seen as an evolutionary stage of traditional platforms.
The essential characteristics of (digital) platforms are:
- Mediation of transactions (supply and demand), of innovations or data
- High scalability and reach
- Low transaction costs
- Network effects
Compared to platforms, the following additional aspects are critical for the success of business ecosystems:
- Pronounced lock-in effects bind users and/or partners to the ecosystem in the long term
- Human-centric view (“E2H” – Ecosystem-to-Human) that is constructed based on the needs of end consumers (see figure)
- Need to rethink business activities with emphasis on customer related Life Areas rather than industries or specific sectors
- Expanding current network effects, enabling new flexibilities for ecosystem players and their retained roles
- High relevance of strategic partnerships and collaborations
Life Areas and roles in the ecosystem
Derived from the need for a stronger, user-centric focus, we look at ecosystems less from the perspective of classic industries or sectors, but rather from the perspective of the so-called Life Areas.
In addition, players can take on different roles: the enabler, the realizer, and the orchestrator.
The Strategy Map as a strategy tool
Initially, the “Strategy Map” can be used to increase the transparency of current business portfolios and offerings. For example, it is possible to determine whether a company is strongly active in a particular Life Area (e.g., Living) or leveraging a specific role (e.g., Enabler).
Additionally, the “Strategy Map” supports the development of new business areas or precise business models. It enables the consideration of offerings from the end-consumer's perspective as well as conceptualizing the various roles that are possible for the business approach.
The exemplary diagram shows the portfolio of an OEM in the automotive sector. Primarily its focus was only on the selling or servicing of its vehicles, but in recent years the portfolio has evolved significantly. In addition to new elements of the portfolio, located in Life Areas other than "Mobility" (e.g., storage solutions in “Living”, special entertainment functions in “Entertainment”), comprehensive offerings in the software environment have developed and gained significant importance. Assessing the current situation as well as the near future, opportunities for the company to act as “Orchestrator” through platform-based approaches arise and show high potential. Specifically, an engagement as co-owner or strategic partner of navigation/map service providers, or offering platforms for applications and services in which third-party vendors are able to offer external services deem highly significant.
Our consulting services
The PwC ecosystem strategy advisory offering
Together with Ecosystemizer, PwC can provide you with “end-to-end” solutions and services regarding ecosystem topics that are of high relevance to you. Ranging from initial strategy definitions to designing concrete ecosystem business models as well as their implementation, the Ecosystemizer and PwC methods are conceptualized based on highly individual and specific needs. In addition to core services, we offer benchmarking, master classes, or tangible coaching sessions in which individual topics can be discussed in depth.
Our strategic partner
Prof. Dr. Julian Kawohl
Talk is nice, but the difference is that we at PwC, practice what we preach – living and working for business ecosystems! We don't want to reinvent the wheel, that is why PwC is cooperating with one of the leading academics in the field of business ecosystems, Prof. Dr. Julian Kawohl (Professor of Strategic Management at HTW Berlin). As founder of the Ecosystemizer, he has been working on ecosystem topics since 2016 and has used the experiences and strategies of globally active ecosystem players to develop a methodology toolbox that helps to increase transparency and new developments of business ecosystems.
PwC and Ecosystemizer create a professional and holistic offering combining methodological strengths and a scientific framework with comprehensive consulting competencies and implementation power as well as deep professional and technical expertise, therefore generating a real USP.
“Companies no longer work for themselves, but with others toward a common goal. This identity shift requires partner management that ensures the integration of different business units into the entire ecosystem and its players.”
Decoding Ecosystem Managers
How companies become great places to work and more successful in buisness ecosystems.
Contact us
Global Venturing & EMEA Startups, Scaleups Leader, PwC Germany
Tel: +49 160 90591673