Chapter 1

Question 1

What is a Wolf Pack ecosystem?

Answer 1

Characterised by low complexity and high levels of orchestration.
New entrants can easily enter but the ecosystem itself is complicated. Key to success is collaboration.

Question 2

What is a Hornet’s Nest ecosystem?

Answer 2

Characterised by high complexity and low orchestration.
New entrants will find it difficult to enter the ecosystem but competitors need to find their own way to capture value, ideally in a way that’s different from their competitors. Known as fragmented competition. As there’s high barriers to entry there’s often a limited number of competitors who tend to be large.

Question 3

What is a Lion’s Pride ecosystem?

Answer 3

Characterised by high complexity and high orchestration.
Participants are seen to be more secure. The high levels of orchestration means the orchestrator will facilitate, monitor and remunerate participants’ actions within the ecosystem.
“Winner takes all” usually one major player at a time.

Question 4

What is a shark tank ecosystem?

Answer 4

Characterised by low complexity and low orchestration.
Participants have to create value themselves through innovation and must capture value directly. Innovation can be anything which separates organisations from the competition.

Question 5

What are the 4 types of ecosystem?

Answer 5

• Hornet’s Nest
• Lion’s Pride
• Shark Tank
• Wolf Pack

Question 6

What are the two factors used to create a type of ecosystem?

Answer 6

• Complexity
• Orchestration

Question 7

What is high complexity defined by?

Answer 7

A highly complex ecosystem could be when there’s a vast range of participants that requite a sophisticated central orchestrator.
Undertaking complex activities.
Obstacles that restrict entry into the environment.

Question 8

What is low complexity in an ecosystem defined by?

Answer 8

Participants roles being easily replaced

Question 9

What is tight orchestration?

Answer 9

When the orchestrator is able to influence the behaviours and actions of participants across the entire ecosystem.

Question 10

What is loose orchestration?

Answer 10

When there’s no central orchestrator so participants act more independently.

Question 11

What are Porter’s Five Forces?

Answer 11

• Competitive rivalry
• New entrants
• Buyer power
• Supplier power
• Substitutes

Question 12

How can Porter’s Five Forces be used?

Answer 12

To understand how profitable an industry is and to understand the forces impacting the industry profitability.
If the forces are high the industry profitability is low. If the forces are low, the industry profitability is high.

Question 13

Competitive rivalry
The force will be high and the industry less profitable when:

Answer 13

There are a lot of competitors
There’s little difference between the products
Competitors are strong
There are exist barriers to the market

Question 14

New entrants
The force will be high and the industry less profitable when:

Answer 14

New companies can easily enter the market
New companies are likely to or intend to enter the market
It’s harder to enter the market when there are significant barriers to entry:
- High costs of entry
- Patents
- Customer contracts in place
- Cost advantages
- Strong brands

Question 15

Buyer Power
The force will be high and the industry less profitable when:

Answer 15

Customers are large and provide a large proportion of company profits
Customers can switch between competitors easily

Question 16

Supplier Power
The force will be high and the industry less profitable when:

Answer 16

There are few alternative suppliers
Cost of changing suppliers is high

Question 17

Substitutes
The force will be high and the industry less profitable when:

Answer 17

Substitutes are easily available. Substitutes are products to which a customer can easily switch and still have their needs met. Needs can be met by different types of product.

Question 18

That is a participant in a business ecosystem?

Answer 18

The organisations or individuals within the environment

Question 18

What is a Business Ecosystem?

Answer 18

‘An ecosystem is a complex web of interdependent enterprises and relationships aimed to create and allocate business value. Ecosystems are broad by nature, spanning multiple geographies and industries, including public and private institutions and consumers.’

A network of companies, competitors, products and stakeholders, such as suppliers and customers. They work together in a way that makes the greater than their individual elements.

Question 19

That is an interaction in a business ecosystem?

Answer 19

The services or products that are exchanged amongst the participants in the environment.

Question 20

What three main elements separate an ecosystem from a traditional market?

Answer 20

• Mutuality
• Orchestration
• Value creation

Question 21

What are the main benefits of being part of an ecosystem?

Answer 21

• Creating more value for customers
• Raising barriers to entry for potential new competitors
• Reducing production costs
• Reaching new customers

Question 22

Participants.
The key questions regarding the role, value and reach of a participant

Answer 22

What is the participant’s role? - Exact role the participant is carrying out in the ecosystem with regards to their own business

What is their key value proportion?
- The capacity and value the participant provides

What is the participant’s reach?
- Whether the participant is able to scale up its operations.

Question 23

Jump with the sharks

Answer 23

A shark tank is highly competitive and competitors need to continue to innovate to keep ahead of new entrants.

Question 24

Roar with the lions

Answer 24

A lion’s pride has one market leader who must ensure that the factor that lead to their success continues to be relevant in a changing world.

Question 25

Fly with the hornets

Answer 25

In a hornet’s nest, the smaller number of major compatitors must find their specialist niche so they can retain their position as one of the major players.

Question 26

Dance with the wolves

Answer 26

In a wolf pack, the orchestrator supports all the participants to coordinate them to work together for mutual benefit, the role of the orchestrator being key to the success of all.

Question 27

What are the three characteristics of organisations in ecosystems?

Answer 27

• Connected and open
• Simple and intelligent
• Fast and scalable

Question 28

Characteristics of an organisation in an ecosystem
Connected and open

Answer 28

Developments in technology means more people have access. Participants can communicate and collaborate easily.

Question 29

Characteristics of an organisation in an ecosystem
Simple and intelligent

Answer 29

Developments in technology mean it’s getting simpler to use and easier for organisations to collect and analyse data to make informed decisions.

Question 30

Characteristics of organisations in an ecosystem
Fast and scalable

Answer 30

Using technology, the number of transactions an organisation can undertake has increased, along with the speed in which they can undertake them. Being scalable means they can scale up easily

Question 31

Drivers of the digital world

Answer 31

• More people now use the internet
• The number of connections is increasing, this allows for more data to be collected and then aids real-time customisation for consumers
• Data analytics is the science of analysing raw data, aids understanding and decision making.
• People are able to interact with machines
• Digital technology and getting connected is becoming more affordable.
• Accessibility for more people living in urban areas.

Question 32

What are the drivers of consumer change?

Answer 32

• Contextualised interactions
• Connected digital systems
• Real-time
• Service
• Transparency
• Peer reviews

Question 33

How can companies improve the customer experience

Answer 33

• Design thinking
• Prototyping
• Experiential pilots
• Brand atomisation

Question 34

What is design thinking?

Answer 34

Design thinking is designing for the individual they are creating the product or service for

Question 35

What is prototyping?

Answer 35

Prototyping is the development of a prototype product in the early stages of a product’s development. Allows the company to see how consumers interact.

Question 36

What is an Experiential pilot?

Answer 36

Experiential pilots are used to analyse the behaviour of consumers and how they interact with an organisation’s product or service to help design new products.

Question 37

What is Brand atomisation?

Answer 37

By thinking about how its products can be designed, brands can allow some areas of its products to be more widely distributed in a variety of different platforms.