When small and medium business owners operate under the idea that they don’t have an ecosystem, they fail to leverage the one they have. Here’s how you can better map the players in your ecosystem, understand how to meet customer needs, and meet those needs to uncover opportunities for growth.
A business ecosystem is the network of organizations – distributors, manufacturers, competitors, customers and even government entities – that deliver a product to customers. Each organization within the ecosystem affects the other, which means that each component of the ecosystem must be flexible and adaptable to survive. Yet many business owners make a big mistake when it comes to an ecosystem – they assume they don’t have one.
As a business owner, you’ve probably built a significant ecosystem, which you should take advantage of for several reasons. First, ecosystems help small and medium businesses thrive in a competitive market which evolves rapidly with technology. Second, participating in a business ecosystem creates a competitive advantage as it allows you to partner with other organizations to accelerate the innovation process and increase revenue. Additionally, by leveraging ecosystem partners, you can differentiate your offerings by using the knowledge you gain within the ecosystem. Finally, leveraging the ecosystem allows you to discover the “blue oceans” of your market (where you can create and capture new demand without worrying about existing competition) and avoid the “red oceans” (where the competitive landscape is crowded and you have to work hard to match or beat your rivals).
When small and medium business owners operate under the idea that they don’t have an ecosystem, they fail to leverage the one they have. It’s time for you to make your intrinsic ecosystem work in your favor.
Creating a business ecosystem: a misnomer
Small and medium-sized businesses probably shudder at the idea of ”building an ecosystem” from scratch. They believe the leadership team should go out and build a network, which often means dedicating resources and time to a “big business” project. If you’ve been trying to build your own ecosystem, now is the time to take a step back because you have been operating under a misconception.
Why? A company already belongs to its own ecosystem. For example, your business already engages naturally with various suppliers, competitors, distributors, and customers. Instead of thinking about building an ecosystem, take advantage of what that network offers to expand into the unknown.
Look inside your own ecosystem and unlock member knowledge by applying the “hidden” knowledge of other ecosystem members. It is a great way to create value for your product or service offerings. You’ll innovate faster if you devote resources to strategically leveraging your position in the ecosystem while engaging with members of your ecosystem to become more adaptable. It will help you deliver value to the market and make your business more sustainable.
Examples of existing ecosystems
A biopharmaceutical company is a prime example of a business that is implicitly part of an ecosystem. These companies exist to develop therapies for patients in need, and these patients are part of the company’s ecosystem. Business ecosystems also include regulators, who they work with to gain approvals to bring therapies to market. Their ecosystems also include investors to support R&D, universities, healthcare providers, competitors and other suppliers, all working to bring therapies to patients.
Implicit ecosystems also exist in other sectors. Some tech companies, for example, use multiple vendors to develop new types of glass or production robots instead of purchasing standard parts, or they use microchips from a network that goes beyond the vendors of microchips. You can leverage your ecosystem by pulling data from it to inform operating decisions or even by working with other competitors.
The benefits of leveraging ecosystems
The main benefits of activating your business ecosystem are to deliver undeniable value to your customers; enter a blue ocean versus red ocean market instead of competing on price; increased commercial capacities; increased efficiencies; and more. Again, to reap these benefits, learn where you fit in your ecosystem. You can do this by mapping the players in your ecosystem, understanding how to meet customer needs, and responding to those needs to uncover opportunities for growth:
- Map your ecosystem to leverage key players.
Each member of your ecosystem responds to a unique need of your customers or clients. Carefully assess your suppliers, competitors, distributors, customers and government agencies to determine their value: what do they add to the ecosystem and what can their contributions teach you?
In my research, the biopharmaceutical company I worked with used academia, part of the ecosystem, to learn more about basic molecules and develop successful drugs. Additionally, the company applied its knowledge to existing information from its parent company, which ran an independent business line, to develop a new therapy. The company has also developed a therapy for a rare disease and has partnered with a competitor to bring it to the global market as part of its ethical duty to patients. Likewise, think about how you can capture value from the different players in your own ecosystem.
- Better understand the needs of your customers.
Work within your ecosystem to learn more about your target audience and determine what they need from your product or service. Find out how your product or service portfolio is not meeting these needs. Every member of your network has directly or indirectly reached your customers or customers, which means that they can probably tell you more about them than you already know. Treat each member as a point of contact who can provide important information. Refer to the map of your ecosystem and ask yourself what insight they might have of customer needs, then ask more specific questions.
- Use your ecosystem to extend your services.
Once you’ve learned about your customers from each member of the ecosystem, you can leverage that information to grow and meet your customers where they are. This may mean expanding into new product or service offerings or into other geographic markets. For example, you might see an opportunity to expand in Japan but not know how to enter the Japanese market. Who in your ecosystem might have the knowledge to help you scale up your services? Your ecosystem can help you respond effectively to new populations or new customer needs.
While it’s easy to think that you need to build a business ecosystem, you might be surprised to learn that you already have an ecosystem that you can use as a toolkit for growth. Ask yourself, “What is our role in the ecosystem of our industry and how can I use my network to deliver undeniable value to the market?” »Your ecosystem may have the knowledge you need to meet the future needs of your customers.
Written by Dr Bethany Valente.
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