Traditional networks are integral to management

09.02.2007

The value network map can be used to examine existing relationships to see whether the enterprise is allied to business partners that have complementary rather than competitive strengths and to identify potential new partners with complementary strengths. "So instead of starting with a blank sheet of paper, you have a methodology for understanding the tangible and intangible assets that flow from organization to organization."

By putting the customer, rather than the modeler's enterprise, at the center of the network, management can examine the value of each relationship and entity in the network to the customer. This can lead to valuable insights into customer needs and reactions that can result in improved business strategies. Most companies have a problem seeing beyond their own products and marketing. This exercise can help management understand what the customer wants and how the customer sees the enterprise and its products. For instance, it can help a pharmaceutical company see how it contributes to the care patients receive and how it can improve that care. It can help management identify gaps and redundancies and develop an approach that helps rather than confusing the customer.

On the project level, an academic research organization may discover a new molecule and may partner with a pharmaceutical company to bring a new product to market. The pharmaceutical will further research the compound and take it through the clinical study process, which demands excellence in complex operations.

Once the FDA approves the drug, the pharmaceutical company may partner with a contract manufacturer to make it in large quantities and with a sales and marketing specialist to furnish doctors with the information they need to prescribe it to patients. The pharmaceutical company may also want help in establishing a strong brand presence for the new drug against existing competition. The value network analysis helps the pharmaceutical company understand which potential partners have the right qualities to provide the best chance of success at each stage in the product development life-cycle.

Network design