What is a Marketnext Ecosystem?
A business ecosystem is the network of organizations—including suppliers, distributors, customers, competitors, government agencies, and so on—involved in the delivery of a specific product or service through both competition and cooperation.
Today, leading companies across industries have concluded that they can no longer play it alone as they contemplate ways for their business to expand, innovate, disrupt or just compete. The solution for businesses to create new opportunities or address challenges lies in their ability to partner within an ecosystem of cross-industry players that work together to define, build and execute market-creating customer solutions.
Recent research shows that executives across industries are considering ecosystem-based business models. Forty-six percent of survey respondents are actively seeking ecosystems while another 24 percent are interested in but not actively seeking them. The technology sector is an early adopter of the ecosystem business model, when tech giants recognized the opportunity to bring together application developers for the mutual benefit of their platforms and consumers. A look at how this sector has leveraged ecosystems over time can help companies in other industries successfully navigate their own ecosystem strategies.
Historically, technology players built ecosystems within their own industry space by combining the capabilities and assets of other technology partners. Yet, they gradually expanded outside their core business by growing new businesses through the aggregation of capabilities and value brought by other industry expert partners. For example, major information and communication technologies vendors, whose core business used to focus on product development and selling to infrastructure customers, reached out to services companies to develop and integrate bespoke technology solutions for their new customers in the Financial, Health or Public Service sectors to name a few. According to our research, there is now a significant number of businesses (40 percent or more) that have decided to build their ecosystems outside of their own industry to go after new markets and customers.
Innovate and Disrupt
Forming or joining an ecosystem provides businesses with a unique opportunity to drive innovation and lead disruption—working with new partners to fuel the joint innovation engine. Accenture Strategy has long advocated the need for evolving collaborative partnerships beyond traditional alliances and channel relationships.3 Building an ecosystem is a powerful move to foster disruption or respond to unsolicited disruption. For example, the app market for smart phones in China is highly fragmented. This opportunity has led to innovation designed to disrupt incumbent players. “Mini-programs” are being developed through a new ecosystem. Popular with consumers, these light programs integrate within the instant messaging app and do not require downloading to use. The payoff for the disruptor? Gaining insight into customer behavior that can be used to drive additional value and strengthen the relationship with consumers.
To remain relevant in their core market, businesses need to be attentive and continuously explore ways to collaborate with partners to maintain competitiveness. Indeed, according to our research, one of the biggest threats feared by businesses comes from new competitors outside of their industry (34 percent).4 The threat of rival ecosystems is real and can become lethal if businesses do not act preemptively. For example, traditional global network infrastructure providers are building partnerships (or even making acquisitions) in the content creation space to mitigate the risk of losing most of the customer value to rising over-the-top content provider stars. Similarly, in the retail sector in China, traditional retailers are joining forces with local internet leaders to fight strong competitive challenges from homegrown online grocery shops.