Classroom Companion: Business

8.3 · Value Shop

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than lesser-known or cheaper lawyers. If the shop’s reputation is destroyed, the 
company may be out of business quickly. This happened to Arthur Andersen after 
the Enron scandal (Fox, 
2002
). The company was then accused of accountant 
fraud and complicity in hiding large deficits from public view. Though the Supreme 
Court acquitted Arthur Andersen for any misconduct, the company was not able 
to enter the consultancy market afterward.
8.4 
 Value Network
Definition 8.3
A value network is a business mediating between members of a market.
The mediation relationships in the value network can be represented as links 
between interacting stakeholders. These links form a network called a value net-
work since the network itself creates value for the business controlling or operating 
the network. 
.
Figure 
8.3
shows a general model of a value network. Value net-
works consist of four components:
5
An organization that provides the services
5
Customers or users in the network
5
Services enabling interaction between the customers or users
5
Contracts that permit customers or users access to the services
Note that the value network is not necessarily a physical network or a business that 
owns a physical network. The value network is an entirely abstract concept. The 
concept implies that the value network establishes, for example, an abstract net-
work of selling and buying relationships between its customers or users. However, 
there are cases where the value network also owns a physical network, e.g., a tele-
communications network, but such ownership is not a requirement for being a 
Service
Contract
Contract
User
Organization
User
. Fig. 8.3 The value network. (Authors’ own figure)