TY - JOUR
T1 - From competitive advantage to nodal advantage
T2 - Ecosystem structure and the new five forces that affect prosperity
AU - Kumar, Piyush
AU - Dass, Mayukh
AU - Kumar, Shivina
N1 - Publisher Copyright:
© 2015 Kelley School of Business, Indiana University.
PY - 2015/7/1
Y1 - 2015/7/1
N2 - 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.
AB - 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.
KW - Competitive advantage
KW - Ecosystem
KW - Five forces
KW - Nodal advantage
KW - Strategic vulnerability
KW - Strategy
UR - http://www.scopus.com/inward/record.url?scp=84937639063&partnerID=8YFLogxK
U2 - 10.1016/j.bushor.2015.04.001
DO - 10.1016/j.bushor.2015.04.001
M3 - Article
AN - SCOPUS:84937639063
VL - 58
SP - 469
EP - 481
JO - Business Horizons
JF - Business Horizons
SN - 0007-6813
IS - 4
ER -