From competitive advantage to nodal advantage: Ecosystem structure and the new five forces that affect prosperity

Piyush Kumar, Mayukh Dass and Shivina Kumar

Business Horizons, 2015, vol. 58, issue 4, 469-481

Abstract: In today's interconnected world, a web of entities rather than predominantly a single firm coordinates a set of activities that deliver utility to mutually connected consumers, thus creating ecosystems. In this article, we suggest that in the current, ecosystem-based production and consumption environment it is important to identify a new set of factors that determines business success. We then propose that in order to develop a network-centric strategic mindset it is important to make a transition from the notion of firm-based competitive advantage to ecosystem-based nodal advantage by which products, services, or processes held by a single firm and affecting one or more ecosystems are exploited individually to improve business. To this end, we offer a new set of five forces that are likely to affect not only a node's financial profitability but also its vulnerability within its ecosystem and the survival of the ecosystem itself. Based on these forces, we recommend strategic triangulation and the formulation of policies to prevent infra-nodal substitution, increase nodal stranglehold, and improve nimbleness to accommodate ecosystemic transitions.

Keywords: Strategy; Five forces; Competitive advantage; Ecosystem; Nodal advantage; Strategic vulnerability (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:bushor:v:58:y:2015:i:4:p:469-481

DOI: 10.1016/j.bushor.2015.04.001

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