Group 19, Section B

The Problem with

Legacy Ecosystems
By Maxwell Wessel, Aaron Levie, and Robert Siegel

Submitted By:
Name Roll No.
Siddhaant Sharma UM21116
   
Sobhan Mishra UM21117
   
Sonali Mohapatra UM21118
   
Soumyabrata Sengupta UM21119
   
Srideep Sarangi UM21120

BIS Assignment
Introduction
In the digital age, the software has enabled innovators like Uber and
Tesla to gather crucial data about customers and create
revolutionary offerings to serve them, breaking away from traditional
reliance on outside partners for sourcing inputs and distributing and
servicing products. To navigate this new world, this article advises
thinking about the macro trends that will shape their industry in the
future, agreeing on a digital strategy to address customers’ needs in
the long term, and developing better metrics to monitor progress.
 Software Transforms
Customer Relationships

Understands Periodically send

people’s questionnaire through
• Uses databases, data mining and one-to-one marketing to increase preferences and online forums and
provides provides information
timely about their health and
customer value recommendations genetics

• Personalized communication to increase customer loyalty

• Personally connecting with customer provides opportunities to capture

data about market and build defensive network effects Understands

customer’s drive
preferences through
sensors and software
and provides autopilot
function

Disrupting Partnership
• Software alone won’t transform business model
• Software development is only a part of the process
• Business models and channel strategies must change in unison
Marketed its first product, the Learning Thermostat,
0 directly to homeowners for do-it-yourself setup,
1 bypassing the typical distribution and installation channel
—professional contractors
02
Enable the device to learn the customer’s temperature
preferences and schedule. Create user profiles, ensured the
thermostat was connected to a home’s wireless network,
and confirm that the customer had the Nest mobile app on
his or her phone.
03 Without contractors in the supply chain, Nest could
develop a user-friendly product from which customers
could easily derive value which disadvantaged
professional installers and challenged the existing
ecosystem.
Value Supply Chain The need for Interdependence

Emerging innovative product designs create the need to restructure

the value chain. Therefore, product development requires an
independent network of partner activity. The best example of such
adaptation is seen in Tesla which owns tight control over its integrated
product model even at the subsystem level
Building a New
Ecosystem
Companies of all varieties will need to reshape their value
chains and sometimes this change will impact longtime
partners in unfavorable ways. There’s no easy way to manage
the transition from one business model to another, but over
the past year, we have observed a handful of best practices
among companies like Apple and Google, successfully
navigating this environmental change
Development of
better metrics
A key factor in managing digital transformation is changing
performance metrics to better highlight the failures of status quo
operations and to support risk-taking and experimentation.
When the metrics change significantly, they can highlight and
reinforce behavior that supports a company’s digital strategy
this, in turn, helps the organization prioritize partnership
relations
Creation of commercial
opportunities for the
partners
It’s not possible to avoid adversely affecting some of your ecosystem partners.
Where possible, it’s vital for firms to create new opportunities for both themselves
and their partners. As the overall economic pie gets bigger, firms can offer more—
albeit smaller—pieces to others in the value chain. Whatever might be the business,
creating commercial opportunities for the partners is a powerful tool in helping
them embrace the company’s vision.
Thank You