In the Ecosystem Economy, What’s Your Strategy?

by Michael G. Jacobides

WHEN NESTLÉ WAS PREPARING to go mainstream with Nespresso, its single-use espresso capsule, it knew that users would need a machine specifically designed to work with the pod. So the company cultivated a network of manufacturers. It didn’t tell customers to buy a Jura, a Krups, or a Braun—it just decided which manufacturers could be on the list. And because the capsule and its interface were patented, other manufacturers could not make Nespresso-compatible machines without permission.

Nespresso was creating—designing—an ecosystem: an orchestrated network spanning multiple sectors. The firms involved work to shared standards, sometimes on a shared platform, to make their ...

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