What Is A Business Ecosystem? Do All Businesses Function Within An Ecosystem? Why Or Why Not? Essay Samples
Type of paper: Essay
Topic: Ecosystem, Environmental Issues, Ecology, Environment, Business, Trade, Customers, Innovation
Business ecosystem is the term that has a challenging meaning for every business. Ecosystem strongly implies the relationship concept, where all the parties have an influence on each other. Thus, business ecosystem can be described as the concept that covers the cooperation and competition among those who are involved in the operating process within the industry. In business, relationships play a crucial role. For example, the activity taken by manufacturers can strongly influence customers, and vice versa. The decision made by one party can effect another party either in negative or positive way. The way the members of the ecosystem interact with each other has a significant impact on the whole system (Hwang, 2014).
In case of Wal-Mart, for instance, manufacturers, suppliers, retail stores, customers, and competitors exist in one ecosystem and have a strong effect on each other. In other words, an activity undertaken by a competitor has a corresponding importance for all other participants of the particular business ecosystem.
Therefore, it will be logical to think that all of the businesses operate within an ecosystem. Probably, not all of the businesses take into consideration the decisions made by other parties. However, in order to sustain a competitive advantage, to operate efficiently, and to be able to predict the sales volume, for example, different organizations have to remember that other parties have an influence on their functioning. Developments of the modern world as one of the factors of business ecosystem can also provide pluses and minuses. Therefore, businesses have to investigate the relationship among the parties within ecosystem very carefully. Careful implementation of business ecosystem principles and, thus, maintaining cooperative relationships with other parties can strongly contribute to the business life and can bring many benefits as well.
What potential role does the ecosystem play in Wal-Mart’s innovation efforts? Provide examples.
As far as Wal-Mart is one of the dominating companies in the retail industry, the conclusion can be drawn that paying attention to the business ecosystem and operating as its full member played its role. The case study indicates that one of the Wal-Mart’s requirements is that the supplier have to operate with RetailLink® system. Particularly this innovation tool provides several benefits for all the members of the business ecosystem within with Wal-Mart is functioning. With the introduction of this system, customers, manufacturers, suppliera, and retail stores got a deeper insight on the constantly changing customer preferences.
Another example can be the mobile solutions that Wal-Mart has introduced. One of the major feaures of the mobile solutions is that customer can make mobile payments for their purchases. Various retailers have formed a company that allows this feature and helps the businesses to adapt to the modern technologies. In addition, this mobile application helps the retailers to trace the purchases and, as the result, gives a possibility to conduct a market analysis (Townsend, 2012).
Predicting customer preferences is a very challenging aspect of every business. Therefore, new innovations that are introduced within the business ecosystem have a significant impact on the success of these predictions. In addition, innovation help to create a competitive advantage of the business and can become a major part of the business’s core competenceis. Introducing innovative solutions that have an effect on the business ecosystem contributes to the business image and to the operating activities of the company.
In terms of innovation and creativity, what are the advantages and disadvantages of functioning within an ecosystem?
However, business ecosystem implies not only cooperation, but also competition. Introducing innovative tools to the market, and, as the result, to the members of the ecosystem, requires many resources. Some companies do not have enough resources, or just not pay enough attention to the other members’ activities.
We can see that Wal-Mart is a huge company that represents one of the dominant retailers in the market. Thus, Wal-Mart has resources and power, and can set the requirements for the suppliers. The case study indicates that Wal-Mart represents a big threat for the small retailers, but at the same time, it gives opportunities for the manufacturers. In such a way, with power and capital huge retailers can manipulate the members of the business ecosystem, and their innovations can create potential problems for the other members.
Still, innovations and creativity in the business ecosystems constantly encourage companies to improve their operations and to think about those who are involved in this organism. Operating and providing benefits with all the improvements and new features introduction contributes for the businesses development and customers’ satisfaction.
Hwang, V. (2014, April 16). The Next Big Business Buzzword: Ecosystem? Retrieved March 19, 2015, from http://www.forbes.com/sites/victorhwang/2014/04/16/the-next-big-business-buzzword-ecosystem/
Townsend, M. (2012, August 15). Wal-Mart Joins Target in Forming Mobile-Payments Network. Retrieved March 19, 2015, from http://www.bloomberg.com/news/articles/2012-08-15/wal-mart-joins-target-in-forming-mobile-payments-network-1-