Such business ecosystems display high levels of interdependence which allows the participants to form alliances on the one hand, and be protected from outside threats on the other (Peltoniemi, 2006, pg. 10-11). All this is done with the aim of creating innovation and attaining commercial success (Peltoniemi, 2006, pg. 11). In consequence, it has become more and more the case that instead of seeing individual companies competing with one another, one can observe competition between entire ecosystems (Moore, 1993, pg. 76).
Platforms are services, tools or technologies upon which ecosystem participants can build innovations and contribute to the delivery of an overall solution (Clarysse et al., 2014, pg. 1166;
Gawer & Cusumano, 2014, pg. 420). Hence, they are key components of most business
ecosystems. The literature treats platforms, in particular those that come in a digital form, as tools through which ecosystem participants interact with one another and which enable entirely new value-creation mechanisms (Kenny & Zysmann, 2016, pg. 61; Rong et al., 2013b, pg. 388). They are controlled by the platform leader (keystone player) who makes them available for use to the other ecosystem participants (Clarysse et al., 2014, pg. 1166) and are programmed to be
multisided, so that all users (including customers) can plug into them and participate in the value co-creation process by developing complementary products (Gawer & Cusumano, 2014, pg. 421;
Tiwana et al., 2010, pg. 675). As such, some authors note how the degree to which a digital platform’s coding is open or not, influences complementor firms’ behaviour as well as their innovativeness (Gawer & Cusumano, 2014, pg. 423; Zysmann & Kenny, 2018, pg. 62-67).
Furthermore, digital platforms have been found to have network effects, meaning that their usefulness grows with increasing users (de Reuver et al., 2018, pg. 125; Edelman, 2015, pg. 92;
Gawer & Cusumano, 2014, pg. 417).
Analysing the concepts of the value chain and the value network shows how the concept of the business ecosystem evolved out of them (Chronéer et al., 2017, pg. 2; Clarysse et al., 2014, pg.
1166; Normann & Ramirez, 1993, pg. 68). A value chain is, in broad terms, a sequential order of value-adding activities that ultimately result in a market offering for the final consumer (Porter, 1985, pg. 33-52; Sturgeon, 2001, pg. 13). Different authors include different numbers of
participants in what they define as the value chain. For example, some focus on the value-adding activities performed by one single firm (Porter, 1985, pg. 37-38), while others, like Sturgeon (2001, pg. 13), broaden their definition to take into account other companies that take over upstream or downstream activities (including suppliers and distributors). Indeed, some even consider the wider external environment which provides infrastructural support as part of the
value chain (Sturgeon, 2001, pg. 13). Furthermore, different value chain models exist, depending on the extent to which one so-called lead-firm governs the activities of all value chain actors (Gereffi et al., 2005, pg. 89; Heuskel, 1999, pg. 56-69). Hence, value chains can range from being fully integrated – i.e. one firm carries out all value-adding activities from raw material sourcing to the sale of the final product (Gereffi et al., 2005, pg. 89; Heuskel, 1999, pg. 69; Sturgeon, 2001, pg. 16), to being made up of a large amount of actors, each of which carries out a single value chain activity (Gereffi et al., 2005, pg. 89; Heuskel, 1999, pg. 36; Sturgeon, 2001, pg. 16-17).
As literature suggests, it is no longer always appropriate to refer to economic value-creation using a chain metaphor, as the process is gradually losing its linear and physical properties (Breuer &
Lüdeke-Freund, 2017, pg. 4; Normann & Ramirez, 1993, pg. 68). As such, the notion of the value network concept has become an alternative to the value chain (Allee, 2000, pg. 36), and to which more and more literature appears to be paying attention (Breuer & Lüdeke-Freund, 2017, pg. 4;
Lusch et al., 2010, pg. 19). Here, the focus lies less on a sequential manufacturing process, as was proposed throughout the industrial age, but on the complex networks some companies develop as a result of their (mostly multidirectional) inter firm partnerships and relationships (Allee, 2000, pg. 36; Basole & Rouse, 2008, pg. 55). In such value networks, as has been postulated by several authors, value is created jointly by the overall network of actors, and not by individual firms (Basole & Rouse, 2008, pg. 55; Lusch et al., 2010, pg. 20; Peppard & Rylander, 2006, pg. 131-132). In addition such value networks are characterised by high levels of coopetition – i.e. the simultaneous cooperation and competition between firms (Hearn et al., 2007, pg. 420). These dynamics allow for quicker responses to new customer demands, something that is of great importance in the fast-paced world we live in today (Bovel & Martha, 2000, pg. 24).
It is stated that companies that are part of such a network are, indeed, able to reinvent the notion of value itself (Breuer & Lüdeke-Freund, 2017, pg. 3). The literature frequently stresses how value is co-created together with the customer (Basole & Rouse, 2008, pg. 57; Lusch et al., 2010, pg. 21) and that the ultimate value derived by the customer is, on the one hand, context
dependent, and on the other hand, not necessarily in the form of a physical product or a service, but in the benefits of their use (Allee, 2000, pg. 37; Basole & Rouse, 2008, pg. 58;
Kothandaraman & Wilson, 2001, pg. 380). As such, one can identify several parallels between the definitions of a value network and a business ecosystem, particularly with regards to their
focus on relationships and joint value-creation, wherefore it can be assumed that the former may indeed have created the foundation for the latter to emerge.
As theory points to business ecosystems as a relatively new form of value network strategy which appears to be eclipsing the traditional notion of the value chain and which is gaining a lot of traction within management research, a systematic literature review on the concept shows which topics business ecosystem research has focussed on over the past five and a half years. In
grouping the most relevant academic papers into clusters, five broad topics can be identified.
These are: the way business ecosystems are organised, business ecosystem performance, business ecosystem patterns, the transition from knowledge ecosystems to business ecosystems, and complementor firm performance.
For the first topic, authors who did research in this area developed models that consist of a number of stages in the process of organising a business ecosystem. Mostly, they agree that initially, keystone or focal firms must identify appropriate ecosystem partners and convey a certain vision about what the ecosystem is to become. Then, they must convince their partners to use the ecosystem platform and to collaborate with one another in order to co-create value.
Finally, when commercialisation is under way, the focal firm needs to optimize its manufacturing process, create a dominant industry design and ensure that the wider environment (i.e. society) adopts the innovation created by the ecosystem (Liu & Rong, 2015, pg. 809ff; Rong et al., 2015b, pg. 293ff; Rong et al, 2017, pg. 234ff; Rong et al., 2018a, pg. 234ff).
When it comes to business ecosystem performance, it can be seen how, on the one hand, there has been an attempt to find performance indicators for ecosystems as a whole (Graça & Camarinha-Matos, 2017, pg. 1ff), and on the other, how several authors have listed a number of success factors for ecosystems (Hsieh et al., 2017, pg. 1ff; Winter et al., 2018, pg. 1ff). Particularly the discussion of business ecosystem success factors centers around achieving a sustainable
ecosystem (Joo et al., 2016, pg. 139ff; Joo et al., 2017, pg. 1ff). In this regard, attention has been paid to finding out how both value-creation and value capture can be maximised (Letaifa, 2014, pg. 288ff). Also, some of the literature takes into account the role local culture can play in a business ecosystem, even in digital environments (Rong et al., 2018b, pg. 247ff).
Furthermore, the literature identifies several ways of classifying different types of business ecosystem. For instance, it is argued that business ecosystems can be classified on the basis of
how open the ecosystem or the platform in question is (Rong et al., 2013a, pg. 75ff; Rong et al., 2015a, pg. 1ff). Also, it is shown how one can differentiate between ecosystems depending on the extent to which the keystone or focal firm exerts control over the other participants or not (Rong et al., 2013a, pg. 75ff; Sun et al, 2018, pg. 420). At the same time business ecosystems can differ in terms of whether the focus lies more on value-creation, or on value capture (Peltola et al., 2016, pg. 1276ff).
Next, the literature dealt with the link between knowledge ecosystems and business ecosystems.
It was described how the two types of ecosystem differ from one another and what circumstances must exist for a knowledge ecosystem to eventually evolve into a business ecosystem (Attour &
Lazaric, 2018, pg. 4ff; Clarysse et al., 2014, pg. 1164ff; Majava et al., 2016, pg. 26ff). While some authors highlighted the fact that knowledge ecosystems do not always necessarily turn into business ecosystems (Clarysse et al., 2014, pg. 1164ff), other authors present cases in which this did happen (Attour & Lazaric, 2018, pg. 4ff; Majava et al., 2016, pg. 26ff).
Finally, in connection with the topic of complementor firm performance, researchers found out what actions and what circumstances lead complementor firms in a business ecosystem to be successful (Kapoor & Agarwal, 2017, pg. 531ff). Among other things, it was discovered that customer involvement in the product development process (Mäkinen et al., 2014, pg. 451ff) as well as extensive involvement in the business ecosystem (Muegge & Mezen, 2017, pg. 157ff) are beneficial to the overall performance of complementor firms, while high ecosystem complexity helps high-performing complementors to maintain their market position (Kapoor & Agarwal, 2017, pg. 531ff).
Naturally, there are some limitations to the review. The fact that research papers that were published no earlier than 2013 were selected, might have led to the exclusion of some significant research on business ecosystems published earlier. Moreover, although two databases were used, some relevant papers might not have been accessible due to limited licenses for the academic journals in question. Finally, as was mentioned in the methodology section, some of the criteria to include or exclude certain articles from the review were based on the subjective assessment of topical relevance. Nonetheless, this thesis was able to provide an overview over the concept of the business ecosystem and which research areas related to it have been of particular interest to academia in recent years.
5. Table of Figures
Figure 1: Partners Interacting with Customers Through a Single Channel ... 15
Figure 2: Generic schema of an ecosystem ... 16
Figure 3: A conceptual business ecosystem ... 17
Figure 4: Moore’s Business Ecosystem ... 18
Figure 5: Business Ecosystem Life Cycle ... 19
Figure 6: The characteristics of a business ecosystem ... 21
Figure 7: A virtuous cycle of investment and return ... 22
Figure 8: Elements of Platform-Centric Ecosystems ... 25
Figure 9: Porter’s Value Chain ... 34
Figure 10: Sturgeon’s Value Chain ... 35
Figure 11: The integrator model ... 37
Figure 12: The orchestrator model ... 38
Figure 13: The layer player model ... 39
Figure 14: The market maker model ... 40
Figure 15: Five general types of value chain governance ... 42
Figure 16: A model of value-creating networks ... 45
Figure 17: A focal business relationship and its business network context ... 49
Figure 18: A conceptual model of service-value networks ... 50
Figure 19: The stages of nurturing a business ecosystem ... 56
Figure 20: Research framework of ecosystems’ business model development process ... 58
Figure 21: The Nature of the Co-Evolutionary Process – Data Structure ... 59
Figure 22: Research strategy towards the elaboration of performance indicators for collaborative business ... 62
Figure 23: Ecosystem Success Factor Model ... 64
Figure 24: Relationships among business activities, sustainable business ecosystems, and firm competitiveness ... 66
Figure 25: A virtuous cycle for sustainable management and business ecosystems ... 68
Figure 26: The sequence of steps that unfold over time in the development of ecosystems... 69
Figure 27: Research Framework of Guanxi and Collectivism's Effect on the Use of Taobao's Service ... 71
Figure 28: Platform strategy along the business ecosystem life cycle (1)... 72
Figure 29: Platform strategy along the business ecosystem life cycle (2)... 74
Figure 30: Three patterns of the IoT-based business ecosystem ... 76
Figure 31: Embedded Business Ecosystem & Central Business Ecosystem... 77
Figure 32: Different business ecosystem types in terms of value-creation and value capture ... 78
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