2. Network Overview
• To show in business marketing it is essential
to develop relationships.
• To show how these relationships between
suppliers and customers can develop in a
network.
• To describe the characteristics of business
networks.
• To identify the main problems a marketer
face and how the marketer can take
advantage of the network in which he / she
operates.
4. Different types of Networks
• Supplier Networks
– Example: Toyota
• Distribution Networks
– Example: IBM
5. Figure 2.1 Toyota’s supply network.
Source: D Blenkhorn and AH Noori, What it Takes
to Supply Japanese OEMs, Industrial Marketing
Management, vol. 19, no. 1, 1999.
6. THE TOYOTA SUPPLIER NETWORKS
ILLUSTRATES……..
• Indirect relationships.
• Co-ordination between
relationships.
• Influence of large companies.
• Problems with a single perspective.
7. Figure 2.2 IBM’s distribution network.
Source: Ford (ed) Understanding Business Markets and Purchasing, London, Thomson Learning, 2001.
8. THE IBM NETWORK ILLUSTRATES:
1. Variety of Companies.
2. Variety of Relationships.
3. Difficulties of Control.
9. Points about Networks
• To examine a Network we need a focal
point.
• A Network means opportunities and
restrictions.
• No one company controls a Network.
• The key task of Business Marketing
(and Purchasing) is to manage each
single relationship.
10. Points about Networks
• A company can influence a large
number of companies even without a
direct relationship.
• Each company in a Network needs
connections between its different
relationships.
• Drawing a company’s Network can
make you believe that it is more
important to others than it actually is!
12. The three layers consist of
• Activity Links - technical, administrative, commercial and other
activities that connect internal activities between two companies.
• Resource Ties – ties that connect the various resource elements
(technical, material, knowledge resources and other intangibles) between two
companies.
• Actor Bonds – how the actors perceive, evaluate and treat each other
16. Figure 2.7 The substance of three relationships.
Figures 2.4, 2.5, 2.6 and 2.7 Source: Håkansson and Snehota, Developing Business
Relationships in Industrial Networks, Routledge, 1992.
17. Network Position
A companies Network position is defined by
the characteristic of the companies
relationships and the benefits and
obligations that arise from them.
18. Conclusions
• One company is only part of the
Network that provides a final consumer
offering.
• Business marketing occurs between two
active companies.
• Each relationship is part of a Portfolio
and a wider Network.