HHL Students Group Work

Cluster vs. Business Ecosystems in Theory and Practice

by Anja Biebl | April 01, 2021
In the course, HHL students explore and discuss cluster concepts and various international case studies. This Winter Term, guest speaker Dr. Jürgen Meffert, Senior Partner, McKinsey & Company, spoke about the design and management challenges of business networks and business ecosystems.

Study Experience: Master in Management Course “Competitiveness”

For more than a decade, the popular Master in Management course “Competitiveness” has been offered at HHL by Prof. Dr. Manfred Kirchgeorg and Prof. Dr. Wilhelm Althammer. The course was originally developed by Prof. Michael Porter at Harvard Business School who then founded the academic network “Microeconomics of Competitiveness” – of which HHL has been a member of since 2006. The course focuses on understanding the synergies between cluster and business ecosystems.

Guest speaker Dr. Jürgen Meffert

In the course, HHL students explore and discuss cluster concepts and various international case studies. They learn about the theoretical foundations and important analytical tools of cluster management and how to apply them. In this Winter Term, guest speaker Dr. Jürgen Meffert, Senior Partner, McKinsey & Company, spoke about the design and management challenges of business networks and so-called business ecosystems.

Synergies and spillover effects between companies in a business ecosystem or cluster must be tapped with intelligent business models and strategies.

– Professor Kirchgeorg

Understanding cluster and business ecosystems

The long tradition of the course is related to the essential practical added value for the students. Companies are often involved in regional clusters or international networks. As tomorrow’s managers, HHL students need to know the functions of cross-company networks and, above all, know how to implement, analyze and apply them in practice.

HHL students learn the entrepreneurial mindset

They must learn the entrepreneurial mindset to initiate and properly manage such networks, which the course provides essential skills for. Additionally, management challenges that have to be considered are discussed. In doing so, the course addresses questions such as:

  • What is the right scope of industry cluster?
  • What is the value proposition of a cluster?
  • What governance is best?
Definition: Cluster vs. Ecosystems

Business clusters

The cluster concept was mainly introduced by Michael Porter at the end of the 80s. They represent regional networks of companies and institutions that are geared toward a more efficient design and development of value chains. Cluster processes can lead to efficiency advantages and also have a positive impact on innovations. The results are higher start-up and relocation rates.

Business ecosystems

The term “business ecosystem” has been increasingly used when referring to industrial networks. Business ecosystems describe a network of a wide variety of companies and institutions which are not regionally limited. They also consist of companies that do not traditionally work together in a value chain.  Business Ecosystems can unite different industries whose technologies and services merge through innovative developments.

In this context, competitive processes take place within a business ecosystem and, at the same time, forms of cooperation and co-evolution are practiced.

A German success story of a Business Ecosystem: The Tolino Case

During the lecture, Dr. Jürgen Meffert spoke about the management challenges of designing modern business ecosystems. As Senior Partner at McKinsey & Company, Meffert advises international companies that successfully develop business ecosystems. He provides practical and unique industry and management insights and enriches the course with his expertise.

Tolino: A German success story

Meffert outlined the ecosystem initiated to introduce the e-book reader “Tolino” in 2013. Tolino is the German book trade’s counter-plan to Amazon’s Kindle. German booksellers Thalia, Weltbild, Hugendubel, and the Club Bertelsmann, together with Deutsche Telekom as a technology partner, decided to compete with Amazon and create their own business ecosystem. One year after its launch, Tolino has already achieved a market share of 35% in Germany. The merger of Germany’s leading booksellers remains an internationally unique success story.

The merger of Germany’s leading booksellers remains an internationally unique success story.

Synergies and spillover effects between industries

Overall, the HHL course “Competitiveness” highlights both, the theoretical and practical relevance for students to engage with the topic of cluster and business ecosystems. Professor Kirchgeorg also emphasizes:

The pressure to innovate, the intensity of competition and the speed of change are increasing, making it difficult for individual companies to hold their own without cooperation and networks. Synergies and spillover effects between companies in a business ecosystem or cluster must be tapped with intelligent business models and strategies. HHL Students should realize early on that they will need to operate successfully in such networks in the future.”