Business Ecosystem the Concept of a \"Business

Business Ecosystem

The concept of a "business ecosystem" sprung from the idea and eventual development of a business environment that is dependent on entities and organizations outside of the business' structure and systems. It is also inevitably linked with Internet and computer technologies (ICT), as information sharing is the core from which the business and its network of organizations/entities collaborate and work together (Iansiti and Levien, 2004, p. 3). From the same authors Iansiti and Levien (2004), an explanation of the process of linkages among organizations define the nature of a business ecosystem: "…the destiny of many organizations is linked together, and interaction between firms has become an increasingly critical and complex phenomenon, sharing elements of both cooperation and competition through a rich network of interrelated products, services, and technologies" (p. 4). Thus, a business ecosystem defines and illustrates how a business thrives and manages to be competitive in the market or industry not only through its own operations and systems, but more importantly and inevitably, with the small and big entities that it needs to ensure that the business operates efficiently daily. A business ecosystem is a linkage of entities sharing information through Internet and computer technologies to ensure the efficient operation of its businesses.

2. In the case study, the existence of a thriving ecosystem in Wal-Mart's operations developed innovations that ultimately strengthened its position as a dominant player or leader of the retail industry. One of the innovations developed as a result of this ecosystem is Wal-Mart's RetailLink®, which enabled its partner suppliers to determine the movement of its products/merchandise in Wal-Mart stores. Part of this system includes providing suppliers with information on products that are in demand and those that do not move from the shelves at all. From Wal-Mart's end, RetailLink® enabled the company to respond to customer demands for a particular product and/or service, and through this technology, suppliers are duly prompted, creating an efficient mechanism wherein all players in the ecosystem are satisfied: Wal-Mart, the suppliers, and the consumer. Another innovation developed from the concept of business ecosystem is Wal-Mart's move to develop stores that respond to the demographic profile of its customers. By developing stores that especially caters to a specific demographic through information generated from its procurement system, Wal-Mart can best provide products and services that are needed in the trade area or location of the store. In the same manner, Wal-Mart expands its ecosystem by engaging small- and medium-businesses who could supply the required products and services for its specialized stores.