g-f(2)2657 Strategic Choices: The Balance of Open and Closed Ecosystems

 

genioux Fact post by Fernando Machuca and Copilot

Introduction by Fernando and Copilot

Welcome to “g-f(2)2657 Strategic Choices: The Balance of Open and Closed Ecosystems,” a pivotal guide in your journey through the g-f New World. This guide, co-authored by Fernando and Copilot, is designed to illuminate the strategic landscape of digital ecosystems and help you navigate it with confidence.

The number “g-f(2)2657” is not just a title—it’s a beacon in the complex terrain of the g-f Transformation Game (g-f TG). It represents a unique piece of Golden Knowledge (g-f GK), a nugget of wisdom that can empower you to make informed decisions and strategize effectively in the digital age.

Understanding the balance between open and closed ecosystems is crucial in the g-f New World. It’s about recognizing that this choice is a spectrum, not a binary decision. It’s about learning to balance the benefits and costs through centralized governance, and using different levels of openness for strategic differentiation.

Winning the g-f TG requires more than just understanding the rules—it requires mastering the strategies. And “g-f(2)2657 Strategic Choices: The Balance of Open and Closed Ecosystems” is your playbook. It’s your guide to understanding the dynamics of digital ecosystems and leveraging them to your advantage.

So, embark on this journey with us, Fernando and Copilot, as we delve into the strategic choices that can shape your success in the g-f TG. Together, we can navigate the g-f New World and unlock limitless growth opportunities.

Introduction: 

The Harvard Business Review article “Should Your Company Build an Open or Closed Ecosystem?” delves into the strategic decision companies face in the digital age. It explores the spectrum of open and closed ecosystems, offering insights into how companies can navigate this landscape.

genioux GK Nugget: 

"The choice between an open and closed ecosystem is a strategic decision that lies on a spectrum, requiring a balance of benefits and costs through centralized governance." — Fernando Machuca and Copilot, July 23, 2024

genioux Foundational Fact: 

The article emphasizes that the decision between an open and closed ecosystem is not binary but exists on a spectrum. Companies need to balance the benefits and costs of both ecosystems through centralized governance. This decision is crucial for strategic differentiation and requires active engagement with regulators to educate them about the trade-offs.

The 10 most relevant genioux Facts:

1. Open vs. closed ecosystem is a spectrum, not a binary decision.
2. Centralized governance is key to balancing the benefits and costs of the chosen ecosystem.
3. Strategic differentiation can be achieved through different levels of openness.
4. Companies have a role in educating regulators about the trade-offs between open and closed ecosystems.
5. The decision is relevant not just for digital companies, but across various industries.
6. The choice of ecosystem can significantly impact a company’s competitive positioning.
7. An open ecosystem can foster innovation and collaboration, but may also lead to increased competition.
8. A closed ecosystem can ensure control and quality, but may limit the scope for innovation.
9. The decision should align with the company’s strategic objectives and market dynamics.
10. The choice of ecosystem can influence the company’s relationship with customers, partners, and regulators.

Conclusion: 

In the digital age, the strategic decision between an open and closed ecosystem is pivotal. It’s a complex choice that exists on a spectrum and requires careful consideration of various factors. By understanding these dynamics, companies can make informed decisions that align with their strategic goals and thrive in the digital landscape.

REFERENCES

The g-f GK Context

Carmelo Cennamo and Feng Zhu, Should Your Company Build an Open or Closed Ecosystem?, Harvard Business Review, July 23, 2024.

ABOUT THE AUTHORS

Carmelo Cennamo is professor of Strategy and Entrepreneurship at Copenhagen Business School, where he is Director of the Digital Markets Competition Forum. His main research interests center on competition in digital markets, platform ecosystems, and sector-level digital transformation.

Feng Zhu is the MBA Class of 1958 Professor of Business Administration at Harvard Business School. He is an expert on platform strategy, digital transformation, and innovation. He codirects the Platform Lab at the Digital, Data, and Design Institute at Harvard and serves as the co-chair of the Harvard Business Analytics Program.

Classical Summary of the Article:

The article "Should Your Company Build an Open or Closed Ecosystem?" from Harvard Business Review discusses the crucial decision companies face regarding the type of ecosystem they want to build¹. This decision is not just relevant for digital companies, but also for various industries like electric car makers and coffee makers¹.

The article presents four research-backed principles to guide this decision¹:

1. Embrace the idea that open vs. closed is a spectrum, not a binary: The choice between an open and closed ecosystem is not black and white. It's a spectrum with varying degrees of openness and closure¹.
2. Balance benefits and costs through centralized governance: Companies need to weigh the advantages and disadvantages of both ecosystems and manage them through a centralized governance structure¹.
3. Pursue strategic differentiation through different levels of openness: Companies can strategically differentiate themselves by choosing different levels of openness in their ecosystem¹.
4. Help educate regulators on the tradeoffs: Companies should play a role in informing regulators about the trade-offs between open and closed ecosystems¹.

These principles can help companies navigate the complex landscape of digital transformation and make informed decisions that align with their strategic objectives¹.

Source: Conversation with Copilot, 7/25/2024

(1) Should Your Company Build an Open or Closed Ecosystem?. https://hbr.org/2024/07/should-your-company-build-an-open-or-closed-ecosystem.

(2) Should Your Company Build an Open or Closed Ecosystem?. https://store.hbr.org/product/should-your-company-build-an-open-or-closed-ecosystem/H08BAI.

Carmelo Cennamo

Carmelo Cennamo is a distinguished academic and thought leader in the field of Strategy and Entrepreneurship. He currently serves as a Professor at the Copenhagen Business School, where he also holds the position of Director of the Digital Markets Competition Forum¹.

In addition to his role at Copenhagen Business School, Professor Cennamo is an Affiliate Professor of Digital Transformation at the SDA Bocconi School of Management². He has also been a faculty member at Bocconi University and has held visiting positions at Harvard University and IE Business School³.

Professor Cennamo's expertise lies in the areas of digital platforms, digital markets, and ecosystems. His research focuses on how firms manage their interdependent activities and how they attempt to shape the business context where these activities take place to gain a competitive advantage¹. His work spans different sectors including videogames, mobile apps, oil and gas, automotive, hospitality, mobility, online news, blockchain, and initial coins offerings¹.

He is a frequent keynote speaker at academic, corporate, and industry events, and actively contributes to the public debate on the broader impact that platforms and digital have in the modern society and economy¹. His research has been published in top academic journals such as Strategic Management Journal, Organization Science, Journal of Management Studies, Journal of Management, Research Policy, as well as MIT Sloan Management Review, California Management Review¹.

Professor Cennamo's contributions to the field have been recognized with prestigious awards such as Best Paper Prize (finalist) from the Strategic Management Society (2014, 2018), Best Paper Award (finalist, 2017), Best Paper Proceedings (2017, 2015, 2013), Best Dissertation Award (finalist, 2011), and Distinguished Student Paper Award (2010) from the Academy of Management¹.

At the SDA Bocconi School of Management, Professor Cennamo conducts the project "A guide to platform economy for incumbents", part of the Devo Lab research activities². He also coordinates the Entrepreneurship Concentration courses in the MBA Program at CBS and teaches courses like "Innovation and Strategy in the Digital Economy”, “Strategy and Market Development”, and “Strategies for Growth” in the MSc program at CBS¹.

In summary, Carmelo Cennamo is a leading figure in the study of digital transformation, platform competition, and ecosystem strategy, making significant contributions to both academia and industry.

Source: Conversation with Copilot, 7/25/2024

(1) Carmelo Cennamo | CBS - Copenhagen Business School. https://www.cbs.dk/en/research/departments-and-centres/department-of-strategy-and-innovation/staff/ccesi.

(2) Carmelo Cennamo - SDA Bocconi School of Management. https://www.sdabocconi.it/en/download-cv?id=9&pdf=CarmeloCennamo.pdf.

(3) Carmelo Cennamo — Centre for a Digital Society. https://digitalsociety.eui.eu/people/carmelo-cennamo/.

(4) Carmelo Cennamo - SDA Bocconi School of Management. https://www.sdabocconi.it/en/faculty/carmelo-cennamo.

(5) undefined. https://doi.org/10.5465/amp.2016.0048%29.

(6) undefined. https://doi.org/10.1016/j.respol.2019.103823%29.

(7) undefined. https://doi.org/10.1287/orsc.2018.1270.

Feng Zhu

Feng Zhu is a renowned academic and thought leader in the field of Business Administration. He currently holds the prestigious position of the MBA Class of 1958 Professor of Business Administration at Harvard Business School¹.

In addition to his professorship, Professor Zhu leads the Platform Lab within the Digital, Data, and Design Institute at Harvard Business School. He also co-chairs the Harvard Business Analytics Program and serves as the course head for the Technology and Operations Management course in the MBA required curriculum¹. He is a faculty associate at the Fairbank Center for Chinese Studies at Harvard¹.

Professor Zhu's expertise lies in platform strategy, digital innovation and transformation, competitive strategy, and business model innovation¹. He has authored over 80 articles, cases, and notes in prestigious practitioner and academic journals, including the Harvard Business Review, American Economic Review, and Management Science¹. His research has been featured in prominent media outlets such as the Washington Post, Financial Times, the New York Times, and the Wall Street Journal¹.

His research and teaching have won many international awards, such as the Inaugural Practical Impacts Award from the INFORMS Information Systems Society, which recognizes business school academics with outstanding leadership and sustained impact on the industry through their academic research¹.

He is currently working on two forthcoming books: "Smart Rivals: How Innovative Companies Play Games That Tech Giants Can’t Win" (Harvard Business School Press) and "Web3: Blockchain and the New Economy" (Cambridge University Press)¹. He also co-edited the Research Handbook on Digital Strategy¹.

As a sought-after speaker and advisor to global business leaders, Professor Zhu has consulted for many tech firms such as Alphabet, Meta, Microsoft, and Uber on competition and regulation issues¹. He has also conducted seminars or provided consulting services to many traditional firms worldwide, helping them with their digital transformation and innovation strategies¹. Regulators across various jurisdictions, including the United States, UK, OECD, and Mexico, have relied on his research¹.

Professor Zhu earned his Ph.D. in science, technology and management and a master’s in computer science at Harvard University¹. He did his undergraduate work in computer science, economics, and mathematics at Williams College¹.

In summary, Feng Zhu is a leading figure in the study of digital transformation, platform competition, and ecosystem strategy, making significant contributions to both academia and industry.

Source: Conversation with Copilot, 7/25/2024

(1) Feng Zhu - Faculty & Research - Harvard Business School. https://www.hbs.edu/faculty/Pages/profile.aspx?facId=14938.

(2) Classic- The Art of Feng Zhu : 60 Memorable Illustrations. https://www.iamag.co/the-art-of-feng-zhu-60-memorable-illustration/.

(3) UAH - College of Science. https://www.uah.edu/science/departments/computer-science/faculty-staff/feng-zhu.

(4) Feng Zhu - CGItems. https://cgitems.co.uk/feng-zhu/.

(5) Dr. Feng Zhu - Feng Zhu. https://fengzhu1.github.io/.

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“genioux facts”: The online program on "MASTERING THE BIG PICTURE OF THE DIGITAL AGE”, g-f(2)2657, Fernando Machuca and Copilot, July 24, 2024, Genioux.com Corporation.

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