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An extended enterprise is a loosely coupled, self-organizing network of firms that combine their economic output to provide products and services offerings to the market. Firms in the extended enterprise may operate independently, for example, through market mechanisms, or cooperatively through agreements and contracts. They provide value added service or product to the OEM.
Alternatively referred to as a "supply chain" or a "value chain", the extended enterprise describes the community of participants involved with provisioning a set of service offerings. The extended enterprise associated with "McDonald's", for example, includes not only McDonald's Corporation, but also franchisees and joint venture partners of McDonald's Corporation, the 3PLs that provide food and materials to McDonald's restaurants, the advertising agencies that produce and distribute McDonald's advertising, the suppliers of McDonald's food ingredients, kitchen equipment, building services, utilities, and other goods and services, the designers of Happy Meal toys, and others.
Extended enterprise is a more descriptive term than supply chain, in that it permits the notion of different types and degrees and permanence of connectivity. Connections may be by contract, as in partnerships or alliances or trade agreements, or by open market exchange or participation in public tariffs.
How an extended enterprise is organized and structured and its policies and mechanisms for the exchange of information, goods, services and money is described by the enterprise architecture.