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    B2B - Lecture 5 - Forming - Business - Networks

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    dsmutum
    The document provides an overview of business networks and partnership formation. It discusses comparing networks to supply chains and marketing channels. Networks are examined from the perspective of how and why firms are attracted to each other. Trust is a key factor in network formation. The document outlines models of industrial networks, including supplier networks and distribution networks. It also discusses classifying network relationships, considering both horizontal relationships between competitors and vertical relationships with suppliers and customers. Factors to consider from a network perspective in B2B marketing include network embeddedness and defining network boundaries. The ARA model is presented as a framework for understanding relative network positions.

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    B2B - Lecture 5 - Forming - Business - Networks

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    dsmutum
    14 views12 pages
    The document provides an overview of business networks and partnership formation. It discusses comparing networks to supply chains and marketing channels. Networks are examined from the perspective of how and why firms are attracted to each other. Trust is a key factor in network formation. The document outlines models of industrial networks, including supplier networks and distribution networks. It also discusses classifying network relationships, considering both horizontal relationships between competitors and vertical relationships with suppliers and customers. Factors to consider from a network perspective in B2B marketing include network embeddedness and defining network boundaries. The ARA model is presented as a framework for understanding relative network positions.

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    B2B: Forming business networks

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    B2B_lecture 5_Forming_business_networks

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    The document provides an overview of business networks and partnership formation. It discusses comparing networks to supply chains and marketing channels. Networks are examined from the perspective of how and why firms are attracted to each other. Trust is a key factor in network formation. The document outlines models of industrial networks, including supplier networks and distribution networks. It also discusses classifying network relationships, considering both horizontal relationships between competitors and vertical relationships with suppliers and customers. Factors to consider from a network perspective in B2B marketing include network embeddedness and defining network boundaries. The ARA model is presented as a framework for understanding relative network positions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    14 views12 pages

    B2B - Lecture 5 - Forming - Business - Networks

    Uploaded by

    dsmutum
    The document provides an overview of business networks and partnership formation. It discusses comparing networks to supply chains and marketing channels. Networks are examined from the perspective of how and why firms are attracted to each other. Trust is a key factor in network formation. The document outlines models of industrial networks, including supplier networks and distribution networks. It also discusses classifying network relationships, considering both horizontal relationships between competitors and vertical relationships with suppliers and customers. Factors to consider from a network perspective in B2B marketing include network embeddedness and defining network boundaries. The ARA model is presented as a framework for understanding relative network positions.

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    LECTURE 5:

    FORMING BUSINESS
    NETWORKS: BUSINESS
    NETWORK PARTNERSHIP
    ATTRACTION
    B2B Marketing (BUSI4508)
    Dr. Dilip S. Mutum
    TODAY’S OBJECTIVES
    To compare and contrast the network
    perspective with the supply chain and
    marketing channel concepts
    To examine the value of a stakeholder
    perspective and the embeddedness of firms
    within networks.
    To examine how and why firms are attracted
    to each other to form networks.
    To examine the role of characteristics such as
    trust in their formation.
    2
    THE INTERACTION MODEL
    SOURCE: HÅKANSSON (1982, P24)

    Environment
    Market structure
    Dynamism
    Internationalisation
    Channel position
    Social system
    Atmosphere
    Power/dependence
    Co-operation
    Closeness
    Expectations
    Organization Organization
    Technology Long term relationships Technology
    Structure Institutionalisation, Adaptations Structure
    Strategy Strategy
    Interaction Process
    Individual Individual
    Aims Aims
    Experience
    Short term exchange episodes Experience
    Products/services
    Skills Skills
    Information
    Financial
    Social

    3
    IOR Marketing Supply/Demand Industrial Network
    Channel Chain
    Upstream
    suppliers

    Direct Supply
    suppliers network

    Manu-
    facturers

    Distributors
    Distribution
    network

    Customers

    FROM IOR TO CHANNEL TO CHAIN TO NETWORK


    4
    INDUSTRIAL NETWORKS
    1. Supplier Networks: Example, Toyota
    2. Distribution Networks: Example. IBM
    3. Product Development Networks

    5
    IBM’S DISTRIBUTION NETWORK
    SOURCE: FORD (ED) (2001)

    Component Suppliers

    Other suppliers
    IBM
    (competitors)

    Joint venture Software


    partners houses
    Value added
    distributors

    Independent
    Dedicated
    distributors
    partners Installers
    (distributors)

    Full service Value added Mail-order


    retailers resellers firms

    End Users

    6
    VERTICAL HORIZONTAL
    Customer Supplier External Internal
    Relationships Relationships Relationships Relationships
    Buyer Supplier Lateral Internal
    Morgan Partnerships Partnerships Partnerships Partnerships
    & Hunt
    (1994) Intermediaries Goods suppliers Competitors Business units
    End consumers Service suppliers Non-profit orgs. Functional depts.
    Government Employees

    Christopher Customer Supplier Influence Market Internal Market


    et al. (1991) Markets Markets incl. Shareholders
    Referral Market Employee Market

    Classic Market Relationships Mega Meta


    Gummesson Dyad (customer/supplier Relationships Relationships
    (1999) Triad (above plus competitor)
    Selected Network (distribution channels) Personal/social Profit centres
    ‘30Rs’ relationships Quality
    Special Market Relationships Mega relationships Employee
    The service encounter (e.g. Government) Marketing services
    Customer’s customer relationship Mega alliances Owner/financiers
    Monopoly relationship (e.g. NAFTA)
    Electronic relationship Mass media
    Non-commercial relationship (etc.)

    CLASSIFYING THE NETWORK RELATIONSHIPS OF THE FOCAL FIRM


    SOURCE: EGAN (2001, P112)

    7
    HORIZONTAL AND VERTICAL NETWORK RELATIONSHIPS
    SOURCE: EGAN (2001, P155)

    Supplier A Supplier B Supplier C

    Direct The Focal Indirect (or non)


    Competition Firm Competition

    Potential
    Typical flow of goods Horizontal
    Relationships
    Potential Customer:
    (Collaboration)
    Vertical End User or Intermediary
    Relationships
    (Partnerships)
    8
    CONSIDERATIONS IN B2B MARKETING FROM A NETWORK PERSPECTIVE

    Network Social capital


    embeddedness

    Defining the Complexity of


    network networks
    boundary

    The ARA model


    & network
    positions

    9
    THE ARA MODEL

    ARA Model is a framework which is


    very useful in order to get some idea
    of the relative positions of the
    organisations making up a network.
    Actor
    References: bonds
    Ford, D (1997). Understanding Business
    Markets: Interaction, relationships and
    networds, 2nd ed., Academic Press, London. ARA
    connections
    Wilkinson, I. F. (2006). The evolution of an
    evolutionary perspective on B2B business.
    Journal of Business & Industrial Marketing,
    21(7), 458-465.
    Resource Activity
    Snehota, I., & Hakansson, H. (Eds.). (1995). ties links
    Developing relationships in business networks.
    London: Routledge.

    10
    ARA MODEL ANALYSIS
    Begins at point of the focal firm and tries to identify the various
    bonds.
    Next, reveals the degree of centrality of the firm to the network –
    does it function like a hub or is it on the periphery of the other actors
    involved.
    Will also show how the resources are used.
    Would enable the firm to determine the degree to which it is reliant
    on its network partner’s resources as well.
    Overall, will allow managers to get a sense of whether their firm is in
    a desirable position or needs to change some of the IORs it is involved
    with.

    11
    THANK YOU
    Any Questions?

    12

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