HOW TO SUSTAIN COMPETITIVE ADVANTAGE: THE FUTURE OF BUSINESS COLLECTIVE 1.0

The ability to orchestrate ecosystems – or business collectives (BC) – will determine future success for global companies. And the supply chain will be the vehicle that delivers this success. That’s the consensus among supply chain leaders as they look to the future.

“It is increasingly possible and indeed necessary for companies to deploy and activate assets they neither own nor control,” say Mike Canning and Eamonn Kelly of Deloitte in a recent report. “While this is not a new strategy, the level of sophistication leaders show when managing complex external relationships is.”

Leaders in this ecosystem or ‘business collective’ strategy “engage and mobilize larger and larger numbers of participants, and facilitate much more complex coordination of their expertise and activities,” say Canning and Kelly. These new partnering endeavors create communities that harness the best of innovation, intelligence and expertise to deliver results.

Such results are already evident in the early-generation ecosystems. For example, in its 2011 Supply Chain Top 25 ranking, Gartner Inc. pointed out that Apple, one of the leaders in ecosystem management, has advanced outsourcing to the level of orchestration – going far beyond a simple offshore manufacturing model.

Apple has since been exploring a vertically integrated approach in certain areas of its business outside of what the company has always insourced (design, retail stores, etc.) This involves acquiring suppliers of specialized hardware components and software solutions as a way of reinforcing competitive advantage.

But what does the future hold for business collectives and how can they advance their ability to sustain competitive advantage? Leaders working at the edge of this developing strategic model have some very definite answers.

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