Your expert for questions
Alexander Rösch
Lead Ecosystem Expert Hub, PwC Germany
Tel: : +49 173 7067401
Email
Understanding ecosystems and their potentials in a better way
The increasing complexity of the business world confronts companies with numerous new problems that they often cannot solve on their own. To be successful now and in the future, companies must cooperate and participate in business ecosystems. This cooperation can lead to significant competitive advantages for the companies themselves as well as benefits for customers. Nevertheless, the strategic alignment within the ecosystem landscape remains a challenge for many companies and is characterized by great uncertainties.
Complementing qualitative research findings, PwC Germany has now collaborated with Strategy&, the Digital Business University of Applied Sciences (DBU), and Prof. Dr. Julian Kawohl of Ecosystemizer to develop an approach to quantify market sizes and thus the relevance of ecosystems in Western Europe, in the NAFTA region, and on a global level.
“Quantifying the business potential of ecosystems is the critical piece of the puzzle for data-driven, informed ecosystem and growth strategy decision making.”
The most important tool of the framework: the Ecosystem Strategy Map
The human as the starting point for the entire value creation in the corporate ecosystem
The convergence and merging of traditional industries into cross-industry ecosystems currently observed in the markets requires a new conceptual framework to illustrate and explain these changes: Kawohl and Krechting (2020) have proposed a new tool to represent economic order for this purpose, based on research and interviews with more than 1,000 strategy specialists and the observation of mega trends. At its core is the belief that there is a paradigm shift – away from B2B and B2C business models to an ecosystem-to-human (E2H) perspective. Accordingly, all value creation in enterprise ecosystems must derive from human needs. Therefore, the main tool of the framework is the Ecosystem Strategy Map, which puts people at the center. All offerings in ecosystems can be classified into ten life areas, which comprehensively represent human needs.
Finding the right scope for ecosystem activities by knowing the Ecosystem Domains
The Ecosystem Strategy Map additionally incorporates 15 Ecosystem Domains across all Life Areas, providing a second means to structure products and services. They are based on current technology and mega trends, along with recent developments among major ecosystem companies.The ecosystem domains are divided into eleven converging domains that comprise a range of life domains and four Super Domains that incorporate all life domains across roles.
How to leverage the Ecosystem Strategy Map and study insights?
The results of the study offer executives and managers a clear guide to successfully navigate the increasingly complex business landscape in the future. They can take six simple steps to determine the ideal strategic position of their companies and their ecosystems within the Life Areas and Ecosystem Domains:
- First, an ecosystem mentality must be established within the company as well as investments made in the area of change management.
- This makes it possible to broaden the focus and remove all existing boundaries.
- The next step is to conduct a thorough analysis of the company's own resources and capabilities to determine its current position on the Ecosystem Strategy Map.
- Next, they must define their desired future target position using the insights gained in this quantitative work.
- Following that, strategy execution begins with finding the right partners beyond traditional industry boundaries to deliver greater value to all customers and other stakeholders.
- In the final step, all threads come together and the strategy is put into practice.
Key results of the study at a glance
- Life Area market sizes
- Life Area growth rates
- Ecosystem Domain market sizes
- Ecosystem Domain growth rates
Life Area market sizes
Measured in terms of the total share of value added, living, consumption, health, mobility, and work are retrospectively the largest Life Areas worldwide in 2019. The ranking of the largest Life Areas will remain stable. By 2030, all but three Life Areas will increase their share of total value added. The exceptions are Recreation and Entertainment, which will decline slightly, and Mobility, which will suffer a significant loss.
“The disruptive upheaval and digital transformation require companies to change – away from the traditional industry-focused logic towards business ecosystems. These offer entirely new opportunities for innovation and value creation through cross-industry partnerships.”
Methodology
We have taken available growth forecasts for industries defined by the UN ISIC classification and applied them to the Life Areas of the Ecosystem Strategy Map. The data are presented geographically as global forecasts and also as localized forecasts for NAFTA and Europe, including historical data calculations for 2019 (the latest data collected) and forecast data for 2025 and 2030. The remapping of UN data to our chosen Life Areas was based on objective proxy data that should provide a clear classification. Where this was not possible, reclassification was based on categorical, qualitative expert judgment. The final results were quality assured in three independent validation rounds with experts.
Follow us
Contact us
Global Venturing & EMEA Startups, Scaleups Leader, PwC Germany
Tel: +49 160 90591673
Alexander Rösch
Lead Ecosystems, Venture Building & Business Model Reinvention, PwC Germany
Tel: +49 173 7067401