“Everything should be balanced as all things should be”, one of Marvel’s most famous villains said. But yet, even if he’s a villain, in our opinion, he’s right. We guess, quite on everything, not to exclude on business. In business, we’re used to knowing about the term “Value Chain”. It’s a framework that describes a full range of activities required to deliver values for customers/clients, which was introduced by Michael Porter in his famous “Competitive Advantage” book. 

Value Chain as the Form of Ecosystems in Business

Value chain describes how businesses could generate value in every touchpoint that they do from two main activities labelled “Primary” and “Secondary”. Like the title, Primary activities stand for core business processes directly involved in creating value for customers/clients.

Primary Activities as the Core Element of Ecosystems in Business

1. Inbound Logistics – The management of raw materials or inputs. For instance, warehousing, inventory control, supplier relationships.
2. Operations – The process of transforming raw materials or inputs into the final products or services. For example, manufacturing, assembly, packaging.
3. Outbound Logistics – The distribution of finished goods/services to the customers or clients. E.g., order fulfilment, delivery, transportation.
4. Marketing and Sales – Promoting and selling the products or services that have been created to customers or clients. For example, advertising, pricing strategies, and sales teams.
5. Service – Process that enhances the value of the product or service in post-sale activities. For example, customer support, maintenance, warranties.

These activities above show the interconnecting processes that produce the business ecosystems that create value for customers. The ecosystems in business reveals how business could not stand without interdependent actions. Even with the primary activities, businesses would still need secondary activities to support the core activities to run smoothly.

Secondary Activities as the Element of Support for Ecosystems in Business

1. Firm infrastructure – The intangible infrastructure of business that enables the business to arrange every activity within the organisation with ease. For example, finance, legal.
2. Human Resource Management – Supporting businesses to maintain or retain the quality of the products and services from the ‘crafter’ point of view. For instance, workforce planning.
3. Technology Development – Business will have the main activities but to run it smoothly and make it more efficient, businesses need technology to streamline the processes. For instance, business support system applications, process automation.
4. Procurement – Activities to support the purchase of goods and services to support the core activities. For instance, purchasing materials, equipment, and technology.

With the concept of value chain above, we can identify that businesses will need entities to survive or even thrive within its industry landscape. Business is about humans. And humans are social creatures, which will be dependent on each other. So, that’s why, ecosystems in business is important to the business itself.