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Can’t find growth? Look beyond your Industry to your Business Ecosystem!

Using your industry as the unit of analysis might be hiding significant risks and opportunities; using a business ecosystem perspective will provide deep insight and strategic context, and identify additional strategies that might have been previously hidden. If you are looking for billion dollar opportunities, then taking the additional step of looking at the ecosystem at the business model level will reveal whether any of those opportunities exist within your broader ecosystem.
Understanding your complete Strategic Context is now a business imperative; visualizing your business within a broader context, understanding all strategic options and determining which ones will likely generate value is a foundation to identifying growth and profit. Ecosystem analysis is an element of Strategic Context.

What is an ecosystem? Drawing the precise boundaries of an ecosystem would be an academic exercise but includes, among others:

• Companies to which you outsource business functions
• Institutions that provide you with financing,
• Firms that provide the technology needed to carry out your business
• Makers of complementary products that are used in conjunction with our own
• Makers of substitute products and services
• Competitors and customers, when their actions and feedback affect the development of your own products or processes
• Entities like regulatory agencies and media outlets that can have a less immediate, but just as powerful, effect on your business.

With the transition from a siloed analog to a connected digital world, industries are being transformed, blended, and connected in new ways. Previously unrelated industries overlap and merge, and old definitions fade away into history. Car mounted mobile telephony and analog cameras used to be very unrelated until the advent of digital cellphones and digital cameras; now they are part of a new industry and ecosystem: the Smartphone. Digital SLRs and point and shoot cameras are now stagnant to decaying categories and car-mounted telephones are a thing of the past.

Why invest in Ecosystem Analysis? What is the value of this work?

• Gaining Deep Insight. You are able to truly understand the sources of value, gain insight into the ecosystem evolution and step back from the product level fog. An Ecosystem half-life is 7 – 10 years while product half-lives are measured in months.
• Developing Strategic Context (see prior post) with a complete view on what business strategies are available.
• Uncovering billion dollar opportunities, if available. Looking deeper at the ecosystem at the business model level will reveal any of those opportunities if they are present. This means iteratively looking at the business model layers of the ecosystem: Customer Value Gaps, Customers and Experiences, Strategic Control Points, Profit Models, Profit Pools, Value Delivery Systems, Current and Potential Players. Those layers are then available to overlay over the ecosystem frame.
• Having a common frame that can be shared across the organization. One component of aligning the organization is to create a common mental model and frame of reference.

What are some examples? (Insights from the examples will not be shared here due to the proprietary nature of the work)

• Simple ecosystem sketch using jobs to be done as framework, Web Real Time Communications. We identify the most relevant dimensions of the ecosystem.

RTC Ecosystem



• Ecosystem frame, Imaging ecosystem circa 2004. This is the result of iteratively looking at all the business model dimensions and ensuring that they align on a common frame.

Ecosystem Digital Imaging



• Business Model Landscape, Imaging Ecosystem circa 2004. This is a precursor to strategy maps. A complete inventory of potential strategies can be developed from this frame.

Ecosystem Digital Imaging

In summary,

Using your industry as the unit of analysis might be hiding significant risks and opportunities; using a business ecosystem perspective will provide deep insight and strategic context, and identify additional strategies that might have been previously hidden. If you are looking for billion dollar opportunities, then taking the additional step of looking at the ecosystem at the business model level will reveal whether any of those opportunities exist within your broader ecosystem.