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During periods of economic uncertainty, many companies tend to reconsider partnerships and focus on protecting market share. But business leaders who embrace ecosystems — relationships with other companies, organizations and institutions that generate value for a common set of customers — are more likely to foster transformation and create measurable, lasting value.
“Ecosystem” has been a buzzword for a long time, but the concept makes a lot of sense. By working together instead of separately, companies can improve outcomes and create more value across their enterprises. In fact, some already have. PwC analyzed 470 companies that were in the top ten total enterprise value of their industry at any point from 2001 through 2021. Among those, about three dozen — which we identified as working in ecosystems as part of their platform business models — delivered significantly higher enterprise value than others.
This hasn’t always been the case, but the digital era combined with the pandemic has accelerated adoption of these collaborative strategies. From 2001 to 2012, our analysis found, the average total enterprise value for companies that had platform business models and those that didn’t was roughly the same each year. But platform businesses started consistently outperforming others in 2013, and by 2021 their average total enterprise value was more than four times higher than that of other companies.
Some companies recognize the need to evolve. In PwC’s latest Global CEO Survey of more than 4,400 executives, about 40% said they believe their organizations will no longer be economically viable in ten years if they continue on their current path. About half of all respondents said shifting customer preferences, regulatory changes, skills shortages and rapidly evolving technology threaten long-term profitability. These concerns reflect broader trends that could have a profound impact on businesses during the next decade, and working with a wide range of collaborators can help companies create economic and social value in tandem.
The ability to collaborate beyond corporate boundaries is essential in addressing today’s business challenges and creating a more sustainable economic future for the organization. Here are some examples of effective ecosystem strategies.
Companies have found that ecosystems provide better outcomes than traditional value chains and can help businesses capture revenue that might otherwise be left on the table. Here are some steps to take in establishing ecosystems for your organization.