Data and digital technologies have transformed how people do business in so many ways. One of these is how companies enter new markets outside of their primary expertise. Take, for example, how Google entered the digital banking realm, how Apple got into the fitness industry, and Tesla’s entry into the car insurance world. And doing this has become easy for these companies as they can easily find ecosystem partners to help them achieve their goals. If you’re thinking of following in the footsteps of these giants, here’s why you should do it. Learn how to choose the right ecosystem partners to maximize your business’ unique value proposition:
Identify and Choose The Right Ecosystem Partners
A Harvard Business Review study conducted interviews and asked senior executives at the CEO and CXO levels how they select partners for this specific need. They found out that identifying the right ecosystem partners involves two key factors. These are:
Data in Context
To determine an ideal digital diversifier for your business, you need data in context. This is what takes people and asset behaviors into a context aligned with your target audience. This will give you insights into what you should offer that the existing players do not. Take note that varying companies require different data. Make sure that your choice will provide you with your exact needs.
Capabilities and Resources in Operation
Scalability is one of the most vital factors when entering a new market. When looking for the right ecosystem partner, you need to ensure that they can scale up the profitability of their operations. Some even offer to research, develop, and manufacture the products you want to provide. This will also let you to choose an ecosystem partner to distribute and market to your target audience.
Determine the Partnership Challenges
Although the digital revolution has afforded many advantages to doing business, it also has its downsides. One of these is the management of ecosystem partnerships which has become more complex. To simplify, look at the following partner types to understand what your business requires.
Satellites
Recently, brands such as Spotify, Epic Games, Blix, Tile, Match Group, and Basecamp have formed the Coalition for App Fairness. This move has changed the scenario of satellites’ once powerlessness. These companies aimed to ask for fairer fees from Apple on purchases within the Apple Store. Apple responded with several changes, including removing 30% fees on purchases through the site.
Complementors
Brand image and reputation is the key factor that complementors take care of. According to the interviews conducted by Harvard Business Review, an executive at Nespresso had concerns about being associated with unwanted third-party brands. This is their main reason not to go into the digital ecosystem. You should partner with this type if you have the same concerns. But as in everything in business, taking risks is part and parcel.
Suppliers
The challenge to achieving deep technological integration with partners is what the suppliers type will help you with. Integrating APIs with a company’s technology architecture is what your partner should focus on to make a real difference.
Strategic Partners
This partner type focuses on the challenges with data ownership, privacy, and brand/branding clauses in partnership contracts. A bit of digging will tell you that Amazon, Google, and Apple have all attempted to get into the mobility industry by building strategic partnerships with legacy car manufacturers. You need these partners to take care of data ownership, usage, customer service, and payment concerns.
