Subject category:
Entrepreneurship
Published by:
London Business School
Version: September 2022
Length: 13 pages
Data source: Field research
Abstract
Ecosystems offer a new way to bring multiple firms together in order to deliver new value propositions. By working together, the hub firm and its complementors can create innovative 'product plus service' bundles that span traditionally separate industries to offer an experience that simply wasn't available before. Such experiences can delight customers and give firms a powerful point of differentiation against competitors. However, creating an ecosystem means building, maintaining and co-ordinating a network of players that may be organisationally separate, yet interdependent and interlinked. This raises formidable challenges in terms of governance, incentives, rewards, managing operations and quality control. Chinese appliance maker Haier solved the puzzle with a system of locally embedded 'microenterprises', collaborating over a shared technology platform, plus a management philosophy that put the focus firmly on the customer and their experience. Haier had come a long way, from shaky foundations in 1984 to becoming not only a world leader but also an innovator in terms of both products and management approaches. Still, tackling the new challenge of the ecosystem era would be no small feat - even for a company of Haier's calibre.
Geographical setting
Region:
World/global
Countries:
China; United States
About
Abstract
Ecosystems offer a new way to bring multiple firms together in order to deliver new value propositions. By working together, the hub firm and its complementors can create innovative 'product plus service' bundles that span traditionally separate industries to offer an experience that simply wasn't available before. Such experiences can delight customers and give firms a powerful point of differentiation against competitors. However, creating an ecosystem means building, maintaining and co-ordinating a network of players that may be organisationally separate, yet interdependent and interlinked. This raises formidable challenges in terms of governance, incentives, rewards, managing operations and quality control. Chinese appliance maker Haier solved the puzzle with a system of locally embedded 'microenterprises', collaborating over a shared technology platform, plus a management philosophy that put the focus firmly on the customer and their experience. Haier had come a long way, from shaky foundations in 1984 to becoming not only a world leader but also an innovator in terms of both products and management approaches. Still, tackling the new challenge of the ecosystem era would be no small feat - even for a company of Haier's calibre.
Settings
Geographical setting
Region:
World/global
Countries:
China; United States