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Valuation Of Business Networks Ranges Into Trillions Of Dollars

Valuation Of Business Networks Ranges Into Trillions Of Dollars

Each industry has a highly unique and valuable supply network that its participants have created in response to the circumstances, regulations, customer needs, and economic situation in the industry. Either by trial and error or by intelligent design somewhere along the way, each of these networks has evolved over the past several decades to reach into its current state as a result of all the changes in economics, technology, regulatory requirements and customer tastes. Sometimes a new player, such as Red Bull, enters the industry and causes a major disruption to the established supply relationships and networks. In most cases, the established supply relationships and networks in every industry will go through a gradual evolution as the environment evolves. Most CEOs are now familiar with the power of supply networks transformation. Currently in many industries these supply networks are rapidly undergoing massive transformations as CEOs adjust their business strategies to global realities.

We will cover business networks and supply networks in great detail in Section II and III. For this reason, we will devote the rest of this chapter to looking at some other types of networks familiar to you. 

The most familiar network to you is your own. A network of
business associates and contacts. Inevitably, they come to your rescue when you need help and vice versa. They are also good sources of information, job leads, business leads and even guidance or inspiration. LinkedIn and Plaxo have put the Rolodex of old online and added far more functionality and possibilities with their web versions In that sense, online networks enhance the possibilities and functionalities far beyond what is possible with the offline networks. An enriching, quasi-structured and purpose oriented interaction is possible using online networking tools - it would be difficult to replicate this in an offline context.

Other Examples Of Networks Abound

Other examples of offline networks are alumni networks from your schools, colleges, previous work places and similar locations. Many of these are now online, though very few are doing much beyond basic database creation and sharing. Just this year, one of my graduate schools has started systematically co-creating executive education programs with the help of its alumni network - even though the possibility has existed in technological capability for almost a decade.

Some of the more well known formal networks are organisations such as the Freemasons, the Rotarians and clubs including the chambers of commerce. Each of these was created for a different mission and most still adhere to their original formal charters. Many of these formal networks are moving online, at least for the purpose of database creation and sharing. Contrary to some beliefs, most of them are rather benign associations that create a forum for gathering and sharing interests. Many networks of professionals with similar interests exist online either at LinkedIn or through professional bodies where the only condition of entry is your interest in the topic of discussion.

One such offline network where I served on the Global Advisory Board broadened its membership by tens of thousands during the five years I was on the board. 
The professional courses, seminars, forums and lecture seminars, forums and lectures series run by the organisation contributed significantly to the body of knowledge on the subject. At the same time, numerous
individuals found suitable jobs and professional progression
advancement though the network.

Another online informal network I have created on a social networking website has grown to more than 6,500 members globally and business opportunities worth more than $650 million are offered every year. It is difficult to estimate the actual trade that results from the network as trade is mostly carried out offline. This network is growing rapidly. Now I am grappling with the question of how to keep its in formal nature and yet enhance its usefulness and relevance
to the participants of the network. 


In the rest of this book, we will focus primarily on the
business networks, their efficacy - efficiency and effectiveness and their utility to the participants. More specifically, we will demonstrate how the business leaders of the future are busily building networks that will underpin their business aspirations. There are five key leverage points of the business networks and we will discuss these in details in the next section.

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Vivek Sood

I write about "The Supply Chain CEOs", "The 5-STAR Business Networks", and, how to "Unchain Your Corporation". In my work, I help create extraordinary corporate results using several 'unique' supply chain methodologies. Contact me for interesting, high impact projects, or, to get access to my IP for creating transformations using these methodologies.

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