The 4 strategic directions of ecosystems
The 4 strategic directions of ecosystems are giving business leaders an understanding of positioning options to create the best strategy.
Every business strategy process starts with analyzing the status quo. In the context of ecosystems, this means mapping the current positioning of your company and its market environment. Then, the next step is to look at all available future options, evaluate the pros and cons of each, and distill the most fitting approaches into the company’s ecosystem strategy. Our 4 strategic directions of ecosystems are giving business leaders an understanding of positioning options at the highest ecosystem level to discuss and decide on the best strategy for their organization.
The 4 strategic directions of ecosystems
Once you have mapped out your company’s place within your ecosystems with the Ecosystem Strategy Map, you can then decide with much more clarity what future ecosystem role you want to play.
1. Life Area Expansion
The company expands its focus to another Life Area in order to generate new sales and revenue potential.
Continuing our Adidas example, the sportswear multinational could move into the Life Area Health using its strong positioning within the sports market. They could partner with and build a community of physiotherapists and offer products and services for them or their patients, e.g., sportswear and shoes for faster recovery of knee injuries.
2. Life Area Integration
The company integrates an upstream or downstream role (Orchestrator, Realizer, or Enabler) in a Life Area.
In this case, Adidas could integrate downstream in the Life Area Socialize (coming from a Realizer role with its Adidas Runners community) and position itself as an Orchestrator with a single digital platform that integrates different sports communities and events - including their Runners community among them.
3. Life Area Focus
The company tries to become the leader in one Life Area and focuses its resources accordingly.
Instead of Adidas being active in multiple Life Areas, they could focus all of its resources to dominate the Life Area Recreation and only offer products and services that help people “recharge their batteries”.
4. Role Dominance
A company concentrates on fulfilling one role (Orchestrator, Realizer, or Enabler) and focuses on ways to expand into other Life Areas with that role.
Adidas is mainly positioned as a Realizer providing sportswear and sports equipment. The strategic direction Role Dominance suggests focusing on providing products and services in all Life Areas in the role of a Realizer. To name a few possibilities, this could mean offering lectures on training and nutrition (Life Area Education), integrating sports in homes, the workplace, and public transportation (Life Areas Living, Work, and Mobility), offering recovery wear (Life Area Health), and more.
How to apply the strategic directions?
The 4 strategic directions of ecosystems have the goal of opening up a world of opportunities for your company and discussing the pros and cons of four distinct positioning options and possibly multiple scenarios within each option. Moreover, your company gets a clearer picture of potential target groups and topic fields for ecosystem offerings.
The following guiding questions can be used in strategic discussions to derive possible approaches that lead to an organization's ecosystem strategy:
- Which of the strategic options fit my current positioning?
- What are the relevant assets and competencies for a particular strategic archetype and to what extent are they already available in my company?
- Which promising strategic direction can be implemented with existing or new ecosystem partners?
With the strategic directions presented, companies can gain a substantial understanding of their future positioning options and strategic implications within ecosystems once they have mapped their status quo.
Start-ups can use them as part of their vision and go-to-market story for investors in later financing rounds or in the identification of exit targets.
Investors, digital units, and corporate startup programs can use these directions to support their own portfolio management.
If you want to visualize the strategic options for your company (as well as your company’s positioning) you can download our Ecosystem Strategy Map for free.