The Three Types of Business Ecosystems

Nearly every major competitive strategic concept—from Porter’s Five Forces to Christensen’s Disruptive Innovation Theory—has sought to explain why one company outperforms another. Today, signals are emerging that indicate the next era of competition will be designed by the ecosystem. Digital technologies, shifting customer relationships (from single transactions to ongoing interactions), and reduced coordination costs are enabling companies to collaborate like never before.?

New Outthinker research (published this week in Strategy & Leadership Journal) reveals companies that compete through ecosystems—rather than through a traditional product or platform model—are 40% more likely to outperform their peers financially and 50% more likely to outperform their peers in their ability to recruit and retain top talent.?

On Tuesday, September 20, a panel of chief strategy officers from the Outthinker Strategy Network, in partnership with Business Ecosystem Alliance and the Haier Model Institute, will discuss the new realities of competition in the world of ecosystems: What new sources of competitive advantage are relevant? How do you decide which ecosystem to align with? What are the foundational elements you must put in place to create a thriving ecosystem??

Get your free ticket here!

Three types of business ecosystems?

Business ecosystems are networks of companies that cooperate, collaborate, and combine their offerings to create value for users. Through ongoing research, we’ve found three categories that business ecosystems fall into: gateway, column, and stack.?

1. Gateway: In a gateway ecosystem, there is one point of entry for the consumer. An orchestrator, the “gateway” brand, provides credibility for all other partners in the ecosystem. Think Apple’s Appstore.?
2. Column: In a column ecosystem, partners can have multiple, individual goals, but they operate as a family. Customers can and frequently do interact with individual brands. Star Alliance, the world’s largest airline alliance, is an example.?
3. Stack: Partners join a stack ecosystem because they align with its purpose or long-term vision. In this case, the purpose is the brand for the entire ecosystem.?

If you are considering aligning your company with an ecosystem, consider these three types of ecosystem models. Which might be most appropriate for your goals—do you value the competitive advantage provided by an orchestrator brand? Or is it more important to you that customers can interact and value your unique, individual brand? Or perhaps you serve an overarching mission that is greater than any ecosystem player??

More resources?

To help you think through these questions, Outthinker, in partnership with Chinese appliances company Haier, has been conducting research all year on the Ecosystem Brand. These additional resources feature conversations with leading experts in strategy and ecosystem research to help you begin your journey into ecosystems:?

• Competition in the Age of Ecosystems panel replays?
• Outthinkers Podcast: Building Business Ecosystems subseries with Tiffani Bova, Ben Gomes-Casseres, and Felix Oberholzer-Gee?
• Ecosystem & Branding Hacks with Emmanuel Probst?