Today the most successful companies are focusing on creating their “Unfair Competitive Advantage” based on the Platform Economy via Collaboration and Knowledge Integration in close cooperation with their customers and partners. The next logical step for these forward-thinking companies is to start crafting their business strategy and Mode of Operations based on so called Value Economy. So, what does all this mean in practice?
The new work in the Platform Economy
Google search for Platform Economy gives you roughly 32 million hits (as per March 2018) and when doing the same search for the equivalent Finnish word alustatalous one gets only 27 000 hits (also as per March 2018). This shows how new even the whole concept of Platform Economy still is at least in Finland. At the same time, it is worthwhile to differentiate the technology and business-based platform economies from each other. Although these two aspects are naturally heavily interlinked with each other. This blog focuses on the co-creation business development side of the platform economy. It is all about the understanding how ecosystem of ecosystems (e.g. Platform Economy) really works.
The Finnish Innovation Fund Sitra has listed three key things to understand when talking about Platform Economy.
- “The key understanding is that it is now the customers or network members who create value, not the network owner”.
- “The most successful firms are market platforms that enable interaction between customers and network partners”
- “You don’t need to be present in a factory anymore, or in an office, but you need to be present for other people”.
One of the key features working in a successful ecosystem is to realize the voluntary nature of a partnership model. This requires a deep understanding of the mutual dependency that arises from sharing risks, responsibilities, resources, competencies and benefits
Route to Customer Experience
The critical success factor in developing business is changing rapidly. Business collaboration has already become the key competitive advantage. Business Ecosystem (Value Network) is the key to success and Customer Experience is driving market decision behavior. Companies understanding the big picture of Excellence in Partnerships will be the winners. These winners are now moving fast from products to customer need driven solutions and from being a vendor to become a strategic partner for their customers and partners.
When time evolves Customer Experience will drive the decision making. A genuine Partnership Value Network is the
key to success. Price erosion will never end and products are the easiest to be replaced. Therefore, it is vital to put the customer in the centre of everything and think thru how the shared competencies and resources could be utilized in
the best way to add the value for customer´s business objectives.
Value Economy based business development strategy
Enabling good things to the world, society, business partners, customers and people in general can and will make the difference for a company´s business. Making the big strategic decisions based on for example improving the access to education, enabling better elderly care via utilizing technology and digitalization or minimizing the electronic waste via circular economy will have a significant impact.
These type of business values will become more relevant to company´s customers, partners and employees. When enabling the difference towards better environment or life of the people, it will be recognized by many. Normally the first to notice the value what the company creates to the society is from the above-mentioned Platform Economy Network stakeholders.
At the end of the day, the genuine value is created by the transformation of a new type of collaboration between everyone. When corporate strategy, business decisions and Mode of Operations is based on the values improving the lives of people it will bring sustainable development and most of all; a long-term value-based business to the company and its business network.
About the author
Juha Merinen (Founder and CEO of SMART Internationalization Oy) is an experienced executive and international sales strategist with over 30 years hands-on experience in competence development, advancement and management of business development and expansion operations in a range of sectors including ICT, Education, MedTech and Software. Juha specializes in measurable sales intelligence and competence development to ensure excellence in internationalization. Juha is also one of the Worlddidac Council Members.