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

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  • Kumar, Piyush
  • Dass, Mayukh
  • Kumar, Shivina

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.

Suggested Citation

  • Kumar, Piyush & Dass, Mayukh & Kumar, Shivina, 2015. "From competitive advantage to nodal advantage: Ecosystem structure and the new five forces that affect prosperity," Business Horizons, Elsevier, vol. 58(4), pages 469-481.
    • Handle: RePEc:eee:bushor:v:58:y:2015:i:4:p:469-481
    DOI: 10.1016/j.bushor.2015.04.001
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    1. Dass, Mayukh & Kumar, Shivina, 2014. "Bringing product and consumer ecosystems to the strategic forefront," Business Horizons, Elsevier, vol. 57(2), pages 225-234.
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    Cited by:

    1. Santini, Mateus Augusto Fassina & Faccin, Kadígia & Balestrin, Alsones & Volkmer Martins, Bibiana, 2021. "How the relational structure of universities influences research and development results," Journal of Business Research, Elsevier, vol. 125(C), pages 155-163.
    2. Sun, Jiazhe & Wu, Shunan & Yang, Kaizhong, 2018. "An ecosystemic framework for business sustainability," Business Horizons, Elsevier, vol. 61(1), pages 59-72.
    3. Suominen, Arho & Kauppinen, Henni & Hyytinen, Kirsi, 2021. "‘Gold’, ‘Ribbon’ or ‘Puzzle’: What motivates researchers to work in Research and Technology Organizations," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    4. Dedehayir, Ozgur & Mäkinen, Saku J. & Roland Ortt, J., 2018. "Roles during innovation ecosystem genesis: A literature review," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 18-29.
    5. R. Tri Priyono Budi Santoso & I. Wayan Ruspendi Junaedi & Sony Heru Priyanto & Donald Samuel Slamet Santoso, 2021. "Creating a startup at a University by using Shane’s theory and the entrepreneural learning model: a narrative method," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-25, December.
    6. Dezhi Chen & Ningning You & Feng Lv, 2019. "Study on Sharing Characteristics and Sustainable Development Performance: Mediating Role of the Ecosystem Strategy," Sustainability, MDPI, vol. 11(23), pages 1-20, December.

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