Dominating the Value Chain is Great when Technology is Static. What’s Your Strategy for the 4th Industrial Revolution?

How To Build An Ecosystem Strategy

Points to note…

+  Today, rather than looking to dominate value chains, [IBM] seeks to widen and deepen connections with research partners, customers and startups. Importantly, it does this not out of any newfound altruism — it would probably prefer to dominate the value chain if it could — but because of hard business realities.

Thinking in terms of value chains is viable when technology is relatively static, but when the marketplace is rapidly evolving it can get you locked out of important ecosystems and greatly diminish your ability to compete.

+  The truth is that value chain based strategies are slow and rigid and the world has become fast and agile. You can’t simply seek to build a better mousetrap, you need to relentlessly connect to build a better ecosystem. Today, that’s becoming less a matter of competitive strategy and more a basic requirement of survival.

+  Ecosystems are nonlinear and complex. So power emanates from the center instead of at the top of a value chain. You move to the center by connecting out. So while an industry giant may possess significant bargaining power, exercising that bargaining power can be problematic, because it can weaken links to other nodes in the ecosystem.

Source:  Medium Technology.  Greg Satell,  How To Build An Ecosystem Strategy…

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