Exploring the Concept of Ecosystems in Organizational Strategy

The concept or the approach of the ecosystem is gradually becoming a matter of interest for many people. It is considered to be the latest or new method that is used in many organizations with an objective to deal with the competitive environment, including in areas in the context of business dissertation help. The concept is not only achieving a position in only technological firms but also managed to enter into retail, financial as well as other manufacturing firms. The concept of an ecosystem can be used now as substitutes for performing the range of analysis. The ecosystem is now considered to be a top strategy whose frequency had been increased from the last five consecutive years. The ecosystem also allows the manager to properly co-ordinate their activities through the set of rules and the roles and entering into contractual agreements with that of the other associative partners. According to the literature by the researchers the ecosystem is broadly classified into three different categories like the business ecosystem that depends on the firm and its environment. The innovation ecosystem focused mainly on the new innovation and the platform ecosystem composed of how actors or sets of roles perform to the different platforms. The notion of platform refers to as the disparate concept in the marketing as well as software engineering that basically brings together the group of users in two different sided networks.

The collection of the platform and the set of modules related to that group of the platform as the platform's ecosystem. The studies of the researcher focused on the range of interdependence between the sponsors of the platform and also their group of complementors. The ecosystem is thus comprised of the notion of sponsors and also the providers of the compliments who aim to make the platform more useful and valuable for the group of customers. The platform-ecosystem comprises of "hub and spoke" form with the group of an array of peripheral firms that are connected to the central part of the platform through the application of open-source technology or using various technical standards like for IT firms it can be software-development kits or the range of programming interfaces. Thus through connecting with this range of platform of ecosystem the group of complementors can not only product innovations but also accessed directly the stage to interact with customers like for example the SAP affiliated by the software vendors or video games that are developed by developers can be used for specific consoles.

In the year 1980, there were several executives of IBM who visited Bill gates, the founder of Microsoft to provide an operating system which can be used in their personal computer of business. Bill gates charged the development fee of $200,000 and also $500,000 for the additional work of engineering. Gates also offered access to DOS and few programming languages to IBM for the new computer. The operating system or other software that was offered could only be licensed by Microsoft. The founder Bill Gates is familiar with the clone-industry that emerges at IBM in the early years of 1960. These clones produced smaller businesses for the IBM compatible machine. According to the opinion of Bill Gates, if the company Microsoft had a license to the operating system for the companies who wanted to get compatible machines, then it will result in bringing Microsoft to the center of the whole latest industries. Now today it is called the concept of ecosystem which is attracting thousands of software as well as hardware companies and also developing million of complementary applications and a range of peripheral devices like cameras, printers, game controllers with large population of customers. Thus the idea of Bill Gates to get a license in return for basic software is now considered to be a concept of platform thinking in the ecosystem.

The platform in the industry delivers various products or groups of services that are done by bringing two or more actors of the market like buyers and sellers or application developers with users together. The complementary innovation like software application or the digital-content stores gets active or stronger with the increase or rise in the number of users and sets of complementors. The effects of network convert the platform into a valuable stage by attracting more numbers of customers. The conventional notion of the firm is expanding to the outside expertise on an unprecedented scale like for example more than 10,000 developers are there for IOS. The technology modularity allows the group of interdependent components related to the system to get produced by the different producers. The architecture of the ecosystem is been initiated by the hub, the group of organization might have the larger degree of autonomy related to how they produce design, price and also operating the respective number of modules while connecting with other through agreements.

The ecosystem always provides the rules as well as processes that can be used to resolve the coordination issues. The modularity which is produced by the set of the platform creates a wide range of platform that can be used to create a condition helps in emerging the ecosystem. The research related to the platform-ecosystem also evaluated how the technological-interfaces shape the collective outcome of the ecosystem. The balancing of the trade-offs which is involved in controlling the core technology can be one of the primary goals of the platform-ecosystem. The platform hubs that have the ability to strengthen their position might choose the requirement of some complementors for investments. Like for example the product which is promoted, shipped as well as sold to that of the final customer through "Amazon Marketplace". Therefore the company "Amazon" is having MSP that is used for sustaining and analyzing the ecosystem with Amazon at its core value.

The ecosystem can be defined as the group of firms that are dealing with the unique number of supermodular complementary which are non-generic and require the creation of specific structure for any particular relationship. It can be said as the strength or one of the specific feature of the ecosystem that they provides a group of structure through which all types of complementarities related to consumption or production can easily be coordinated with proper utilization of vertical-integration. The non-generic complementarities is one of the key attributes of the ecosystem which also proven to have entailing feature to the degree of customization. The ecosystem which is usually defined by the non-generic complementarities at any of the group level means that if there is any competition which aims to attract higher profit within the ecosystem there lays the alignment on how all the respective members get benefited by the respective services of the enterprise or namely an ecosystem. This helps the firm to gain competitive advantage over the other enterprises or any set of the unrelated firms. The firm that are basically participating in the android environment or ecosystem faced the issues related to the total number of spoils within different parts of an value adding process or methods, but at the same time having desire to beat the productivity of IPhone in Market.

The specific alignment structure that is been required for the value creation is usually determined by the non-generic complementarities in business model. The value creation in the ecosystem can be illustrated as the context of IT or digital enabled platform comprised by the core technical platform as well as the application that can be used for complementing it. The platform-ecosystem where the group of participants basically requires the creation of specific relationship structure and also proper alignment can be useful in creating the value among it. Although it can be said that the concept of complementarities in the value-modeling is not latest but the non-generic concept of complementarities is usually new.

The firms like Google, Apple as well as Facebook play some of the orchestrating role within the network of firm which is considered to be the type of platform-innovation ecosystem. It is been analyzed that as the platform interfaced becomes more open and usually more agents gets attracted towards the ecosystem, thus the platform-leaders can be able to access or utilize large number of innovative complementarities capabilities. For example using the non-generic complementarities innovation it can be found that Google, Twitter and Amazon have developed and also shared the large APIs with an aim to encourage the software developers for utilizing the web-services platform. The company Google had published almost 51 APIs for the different products like Google-Map, You-tube and many others which is considered as the key resource for digital ecosystem-platform development. It also help the companies to derive larger part of values from user and also enhance the non-generic complementary innovation. The economic governance plays an important role for building also setting the legitimacy of the number of platform leaders.

It is found that in the middle of the year 1980s, there are number of firms who started commercializing the copies of the PC of IBM and thus the actual ecosystem of firms grew outside to that of the supply chain of IBM. Thus the company Microsoft and Intel planned to weaken the strategy of IBM by resisting the development of architecture of PC using Intel Microprocessor and the operating system offered by Microsoft. Thus IBM lost their control over the supply chain and in the year 1990, Microsoft and Intel becomes the platform leaders of an ecosystem. It can be said that in the well-governed environment the platform-leader will be able to preserve the interest of ecosystem members and also to prevent the margin of complementors. The decision related to the design of technological interfaces and also the set of governance-decisions can have the collaborative and innovative impact on the agents of platform. The company Intel as an example took the care to ensure that the complementors associated with their business might remain profitable by refraining it to compete in number of markets directly. The actual emergence of the competition from the group of former complementors can turn to create a reaction by the platform leader to start competing in return with list of former complementors who turned to be rivals by closing the technological interfaces offered to them. The platform leaders who are present within this ecosystem faced one of the critical difficulties of attracting as well as incentivizing the innovative autonomous agents to act in enhanced platform.

The leader of the platform of an ecosystem can get advantage from the other complementarities in terms of customer engagement. As in the concept of ecosystem the android phone users decides which application they must buy and from which provider. Thus as they had the better market capture and also bound together with the set of interdependencies the opportunity can be created for the leaders of platform to attract more customers. The combinations of choices made by manager help the organization to sustain the better position of the platform-leader. The non-generic complementarities allow the platform-leader to co-ordinate without any involvement or necessity of the hierarchical governance. The platform leaders set a perfect example of the network who gets central position in market because of the application of innovative ecosystem in business. It is because of their ability to utilize some of the useful standards or number of requirements that enables the range of complementors to have their own descriptive decisions for the components like design and price of product. Thus it can be concluded that the complementarities of the ecosystem which can be non-generic helps the leaders in platform to improve coordination and also creates the better level of value creation in it.

Reference List

Book

Cusumano, M.A., Gawer, A. and Yoffie, D.B., 2019. The business of platforms: Strategy in the age of digital competition, innovation, and power. New York, NY: HarperCollins.

Journal

Gawer, A., 2014. Bridging differing perspectives on technological platforms: Toward an integrative framework. Research Policy, 43(7), pp.1239-1249.

Jacobides, M.G., Cennamo, C. and Gawer, A., 2018. Towards a theory of ecosystems. Strategic Management Journal, 39(8), pp.2255-2276.

Tiwana, A., Konsynski, B. and Bush, A., 2010. Research Commentary—Platform Evolution: Coevolution of Platform Architecture, Governance, and Environmental Dynamics. Information Systems Research, 21(4), pp.675-687.

Website

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