Given the amount of turmoil digital disruption is causing, it’s time for companies to evaluate the threats and opportunities of the digitizing business world, and start creating new business options for the future — the more-connected future of digital ecosystems.
A recent MIT research found many of the companies were seeking to transform on two dimensions:
These two dimensions became the axes of a 2×2 framework with four business models:
The Supplier Model
Suppliers have, at best, a partial knowledge of their end consumer, and typically operate in the value chain of another powerful company. As enterprises continue to digitize and search becomes easier, suppliers are likely to lose power and be pressured to continually reduce prices, perhaps resulting in further industry consolidation.
The Omnichannel Model
Omnichannel businesses provide customers access to their products across multiple channels, including physical and digital channels, giving them greater choice and a seamless experience. The challenge is to gain more and more knowledge of the end consumer and his or her goals and to reduce the amount of customer churn.
The Ecosystem Driver Model
Some companies establish an ecosystem by creating relationships with other providers that offer complementary (or sometimes competing) services. Ecosystem drivers provide a platform for the participants to conduct business; the platform can be more or less open. Like omnichannel businesses, ecosystem drivers use their brand strength to attract participants, ensure a great customer experience and offer one-stop shopping. They aspire to “own” the customer relationship in one domain like financial services by increasing their knowledge of their end consumers. They extract rents from participants in their ecosystem — both consumers and service providers — and rely on brand strength and feedback from consumer ratings and reviews to build their reputation and revenues. An ecosystem needs to be a destination for customers in a specific domain (for example, health care, retail, entertainment, financial services or small business).
The Modular Producer Model
Modular producers provide plug-and-play products or services that can adapt to a variety of ecosystems. To survive, modular producers must be among the best in their category. To thrive, they need to continue rolling out new products and services to demonstrate that they are among the best options available and also well priced. After all, they operate in a hypercompetitive environment in which it’s often very easy for customers to search for alternative solutions and switch.
For more information, please, read the article in MIT Sloan Management Review:
http://mitsmr.com/1cYrMqL
