Marketing Strategy and Competitive Positioning pdf ebook

The flexible network: associated with conditions of high environmental volatility but 
characterised by inter-organisational links that tend to be collaborative and long term 
in duration, where the network coordinator manages an internal team that identifies 
customer needs and establishes sources of supply to satisfy customer requirements. For 
example, as noted earlier, many of the multinational pharmaceutical firms are tied to 
core competencies in organic and inorganic chemistry and are seeking to establish alli-
ances with entrepreneurial biotechnology firms. The larger firms have too much invested 
in their current technology to switch completely to biotechnology, but want to exploit 
partnerships to ensure they have a source of biotechnology-based products. The Uber 
example discussed earlier also provides a model of a flexible network, where Uber acts as 
a hub promoting and defending the service and providing the smartphone software, but 
using a network of external partners (drivers) to provide the taxi ride to the customer.
3 
The value-added network: associated with less volatile environments and based mainly 
on transactional relationships between network members. For example, the network 
coordinator may use a global network of suppliers, but still maintain substantial internal 
operations – the core organisation may contract out for many added-value functions 
such as production, but retain responsibility for innovation and product design. Indus-
tries using this type of network are clothing manufacture, furniture, eye-glasses and 
some services – the link is that the value-added network fits situations where complex 
technologies and customised product offerings are not required.
4 
The virtual network: associated with situations where environmental volatility is rela-
tively low, and the core organisation seeks to establish collaborative relationships with 
other organisations. This is similar to what has been called the ‘virtual corporation’, 
which seeks to achieve adaptability to meet the needs of segmented markets through 
long-term partnerships rather than internal investment. In these cases, market access and 
technology access are the key drivers and, as with the flexible network, formal strategic 
alliances are the most common method for collaborating. The virtual network provides 
a buffer against market risks and allows access to new technology.
A broader and more complex view of network types was provided by Achrol (1997), who 
attempted to reflect three important characteristics that may differentiate different types 
of network: whether they are single-firm or multi-firm, whether they are single-industry or 
multi-industry; and, whether they are stable or temporary. Achrol’s (1997) view of networks 
identifies the following types:
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