CandleFocus Glossary Editor
Business Ecosystems are complex networks which consist of all the different components necessary to deliver a certain product or service. This includes suppliers, distributors, customers, competitors, government agencies, and other entities that contribute to the success of the product or service. Due to the ever-changing nature of the market and policy, every entity in the eco-system is subject to change, as no one factor is immune to the effects of the others. This creates an environment of constant adaptation and flexibility, requiring each entity to evolve in order to stay alive and active in the system - similar to that of the dynamics found in a natural, biological ecosystem.
The development of the term ‘business ecosystem’ was credited to James Moore, a business strategist in 1993. Moore spoke of the concept of ecosystems in the context of the computer industry, with the introduction of ‘building blocks’ as small components of a larger product possessing intrinsic value. These building blocks, made up of nuts, bolts, software and other components, came together to form a product of higher value which customers desired and businesses now competed to produce.
Ecosystems create strong barriers to entry for new entrants and competition, as the system requires the involvement of existing players in order to achieve a certain level of inter-dependence and coordination. This factors into the decision-making process of current businesses in the system, which typically seeks to strengthen its position in the development of new products or services instead of welcoming competitors on the same platform that can act as fierce rivals.
In conclusion, business ecosystems are networks composed of the various entities necessary to produce and service a product, while being affected by and affecting other elements in the same system. These ecosystems posses powerful barriers to entry, creating a difficult environment for new business entrants and competition. As such, companies must continuously adapt and evolve in order to stay alive in the ever-changing environment of the economy.
The development of the term ‘business ecosystem’ was credited to James Moore, a business strategist in 1993. Moore spoke of the concept of ecosystems in the context of the computer industry, with the introduction of ‘building blocks’ as small components of a larger product possessing intrinsic value. These building blocks, made up of nuts, bolts, software and other components, came together to form a product of higher value which customers desired and businesses now competed to produce.
Ecosystems create strong barriers to entry for new entrants and competition, as the system requires the involvement of existing players in order to achieve a certain level of inter-dependence and coordination. This factors into the decision-making process of current businesses in the system, which typically seeks to strengthen its position in the development of new products or services instead of welcoming competitors on the same platform that can act as fierce rivals.
In conclusion, business ecosystems are networks composed of the various entities necessary to produce and service a product, while being affected by and affecting other elements in the same system. These ecosystems posses powerful barriers to entry, creating a difficult environment for new business entrants and competition. As such, companies must continuously adapt and evolve in order to stay alive in the ever-changing environment of the economy.