Value Network

Definition

A value network is a business analysis perspective that describes social and technical resources within and between businesses. The nodes in a value network represent people. The nodes are connected by interactions that represent tangible and intangible deliverables. These deliverables take the form of knowledge or other intangibles and/or financial value. Value networks exhibit interdependence. They account for the overall worth of products and services. Companies have both internal and external value networks.


Value Network

What is ‘Value Network’

A set of connections between organizations and/or individuals interacting with each other to benefit the entire group. A value network allows members to buy and sell products as well as share information. These networks can be visualized with a simple mapping tool showing nodes (members) and connectors (relationships).

Explaining ‘Value Network’

In business and commerce, value networks are an example of an economic ecosystem. Each member relies on the others to foster growth and increase value. Value network members can consist of external members such as customers or internal members such as research and development teams. Weakness in one node can affect the entire network. For example if a development team is weak, the production team has a harder time creating the product which, in turn, can leave a buyer waiting for their shipment.

Further Reading