1. The document discusses business networks and relationships. It provides examples of supplier networks using Toyota and distribution networks using IBM. 2. Networks are made up of various relationships between companies, including indirect relationships. A company's position in a network depends on its relationships with other companies. 3. Business relationships between companies have three layers - activity links, resource ties, and actor bonds - that connect their internal activities, resources, and how the people in the companies perceive each other.

1. Business Marketing
and Networks
Overview

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.

3. Network Thinking
“No business is an Island”

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!

11. Business relationships between
two parties has three layers

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

13. Figure 2.4 Activity structures, links and pattern over five companies.

14. Figure 2.5 Resource ties between five companies.

15. Figure 2.6 Actor bonds between five companies.

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.