Value Networks: Definition, Benefits, and Types

What Is a Value Network?

A value network is a set of connections between organizations and/or individuals that benefit the entire group. It allows members to buy and sell products and share information. Networks can be visualized with a mapping tool showing members and relationships.

Key Takeaways

• Value networks are connections between individuals or corporations that benefit the group.
• Members can buy, sell, and exchange information.
• Networks can be depicted with mapping tools.
• A primary advantage is using network connections to apply resources, influence, and insight.
• Value networks consist of internal and external resources.

Understanding a Value Network

In business, value networks are economic ecosystems. Each member relies on one another to foster growth and increase value. External members include customers, while internal members can be research and development teams.

Value networks enhance innovation, social welfare, and the environment. Weakness in one node affects the entire network. For example, if the development team is weak, the production team struggles and buyers may experience delays.

Types of Value Networks

Fjeldstad and Stabells Network

Fjeldstad and Stabells believe that important parts of a network include customers, services, service providers, and contracts allowing access to services. Social media platforms like Facebook, YouTube, Instagram, and TikTok illustrate this theory.

Normann and Ramirez Constellations

Normann and Ramirez view networks as fluid setups that allow for constant change and improvement. Members analyze relationships, seeking opportunities to add value.

Verna Allee’s Networks

Verna Allee’s networks create tangible and intangible values and she advocates for value network analysis in all business facets to maximize value.

Benefits of a Value Network

A value network provides benefits through applying the resources, influence, and insight of network connections to a business or individual. Startups seek external connections, such as investors and mentors, for guidance in development and growth.

While founders understand their products or services, bringing them to market, finding customers, and scaling up may be new to them. They may seek advice from experienced stakeholders, which is an intangible benefit. Specialized groups like incubators and accelerators can also provide exposure to mentors and investors.

Example of a Value Network

An investor guides a startup to benefit from its development. The investor shares expertise and fosters introductions to other businesses. For example, they may connect the startup to a company for prototyping or finding a mass manufacturer or distributor. These connections benefit all parties by increasing business opportunities.