grad-business-ecosystems

Business Ecosystems (Moore)

Overview

Moore's business ecosystem framework conceptualizes industries as co-evolving communities of firms, customers, and other stakeholders that collectively create and capture value. Ecosystems progress through four stages (birth, expansion, authority, renewal), and participants occupy distinct roles — keystone, dominator, or niche player — each with different strategies and implications for ecosystem health.

When to Use

• Analyzing platform-based markets or multi-firm value creation networks
• Evaluating strategic positioning within an industry ecosystem
• Assessing why an ecosystem is thriving, stagnating, or collapsing
• Planning entry strategy into an existing ecosystem or designing a new one

When NOT to Use

• When the industry is best modeled as atomistic competition (no co-evolution)
• When the analysis focuses on a single firm's internal strategy (use RBV or dynamic capabilities)
• When formal supply chain analysis with contractual specificity is needed

Assumptions

IRON LAW: Ecosystem health depends on DIVERSITY and PRODUCTIVITY — a
dominant player that extracts too much value destroys the ecosystem
it depends on.

Key assumptions:

1. Firms co-evolve — strategy is shaped by and shapes the broader ecosystem
2. Value is created collectively and distributed among ecosystem participants
3. Ecosystem leadership requires nurturing the ecosystem, not just capturing value
4. Ecosystems have life cycles — what works in birth stage fails in renewal stage

Methodology

Step 1: Define the Ecosystem Boundary

Identify the ecosystem: core value proposition, platform or focal firm, and key participant categories (suppliers, complementors, customers, competitors).

Step 2: Assess the Ecosystem Stage

Stage	Characteristics	Key Challenge
Birth	Entrepreneurs define value proposition around a seed innovation	Protect ideas, build initial partnerships
Expansion	Scaling to broad market, attracting complementors	Achieve critical mass, fend off alternative ecosystems
Authority	Stable architecture, clear leader, standards established	Maintain bargaining power, encourage continued innovation
Renewal	Mature ecosystem faces disruption or stagnation	Reinvent or be displaced by new ecosystems