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Do You Need a Business Ecosystem?

The term “business ecosystem” has firmly established itself in the dictionary of management buzzwords. For example, research by the BCG Henderson Institute found that in annual reports the term “ecosystem” occurs 13 times more frequently now than it did a decade ago. All of a sudden, new business ecosystems seem to be popping up all around us. For example, Walgreens Boots Alliance CEO Stefano Pessina early this year declared that his company’s partnership with Microsoft will help create an “ecosystem” connecting its drugstores to patients, their insurers, and local medical care providers; SoftBank founder Masayoshi Son announced his ambition to create an “ecosystem” of companies for a second Vision Fund that can collaborate to accelerate growth; and the government of Canada announced support for a new aerospace innovation “ecosystem.”




Many managers, fearful of missing out on this trend, feel compelled to come up with their own business ecosystems—or at least to become part of some large emerging ecosystems. But they struggle with the broad scope of the concept, unclear definitions, and the lack of practical advice.


We suggest thinking of a business ecosystem as a solution to a business problem, as a way to organize in order to realize a specific value proposition. To this end, a business ecosystem is a governance model that competes with other ways of organizing the creation of a product or service, such as a vertically integrated organization, a hierarchical supply chain, or an open-market model.


We suggest thinking of a business ecosystem as a solution to a business problem, as a way to organize in order to realize a specific value proposition.

To help managers find their way through the confusing jungle of ecosystem thinking, we aim to address the following questions:

  • What is a business ecosystem, and how is it different from other governance models?

  • What are the basic types of business ecosystem?

  • When is an ecosystem the right governance model?

  • What are the benefits and drawbacks of organizing in a business ecosystem?


Through addressing these questions, we can pinpoint the genuine needs of the private enterprise and propose accurate and feasible solutions.

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