Ecosystem value chain multiplies your earnings

In digitalization, new agile players rule the game compared to their traditional competitors. Digital platform economy and ecosystem thinking are taking over the market. Many start-ups that started the disruption in their markets, such as Amazon or Airbnb, have rapidly grown to become major players in their industries. Businesses based on traditional value chains are suffering while competitors’ ecosystem value chains multiply their business opportunities.

The digital ecosystem is changing the revenue logic. The value is no longer generated in the traditional production pipeline from producer to the end user. In an ecosystem value chain earnings are growing simultaneously, in many places and in many different ways. Platforms extend the business network and offer more opportunities than traditional channels – and as things get complicated, also challenges that are not solved by traditional means.

Ecosystems bring together a wide variety of players, activities, services and products. At its best this multidisciplinary network responds quickly to customer needs and creates new offerings by combining its network expertise in an innovative way. A functional digital ecosystem benefits all its members, and in the best case it incorporates end-users that are actively involved in the development of products and services.

In addition to money, the network creates information and other immaterial assets that are relevant to the business. The ecosystem needs a digital platform to ensure that network diversity does not end in chaos. It supports the flow of internal and external information, data, content and messages within the network. A high-quality, responsive digital platform guides its users to the best practices and leverages the valuable knowledge of its members to others.

Generate value and increase productivity

The ecosystem is built on mutual trust. The more openly the members share their resources and business data, the more efficient and productive the ecosystem will be. For example, by sharing their cost structures and processes network members can search for the most efficient and economical players among them. There is a big shift in thinking: in an ecosystem model, it is sometimes worthwhile to share traditional trade secrets in order to make the most out of them.

Value is not generated in the same way in all ecosystems. The steps in the traditional value chain can be completely bypassed and unnecessary middlemen removed. The success of a single player brings benefits to everyone in the network. Productivity increases when the whole network creates value in addition to the value generated by individual businesses.

Groups of small players can challenge big players and succeed with agility and innovation. As value chains crumble the disruption opens up opportunities to challenge the whole production chain. For example, Amazon revolutionized book sales and dictated new terms for the distribution business. The company has since expanded to other areas of e-commerce where delivery speed and reliability are important.

The digital ecosystem creates new business opportunities but requires a reliable and sustainable digital growth platform that enables value creation for the benefit of all the members in the network.