Why business networks create value to fulfill the demand of the market.
This week we talk about how social networks work. How individual nodes can influence an entire network and how business can use networks in order to produce what the market desires. On the basis of the following literature I discuss this process.
Boyd & Ellison (2007) merely give a definition of social network sites and how they developed over the years. Social network sites differentiate from each other at the level of access, visibility and the amount of features integrated into the website. Important is that individuals can connect and share information with their network. The visibility of these networks gives people the opportunity to expand their own network, maintain contacts and even get to know new people. These social networks are a good source of date to research individual and group behavior in relation to the network.
Borgatti, Mehra, Brass and Labianca (2009) define the concept of a social network by analyzing this with a physical and social perspective. They make use of simplistic examples to explain the difference between a centralized and a decentralized network where single nodes can have a powerful bargaining position. When it comes to more extensive networks we have to look to additional literature, while Borgatti et al. set the boundaries to only explain the base concept.
At last, Kauffman, Li and van Heck (2010) apply the concept of social network within the business sector. How multiple businesses can form a business network together in order to produce the services and products, which the market demands. These products and services could only be made through the combination of forces of the different companies. This form of producing can be alluring for companies whereas it gives them the opportunity to fulfill the wants and needs of the consumer, reach their target group and be cost effective. Companies have to keep the firm and consumer informedness in mind. After all, knowledge is power.
The two examples I have chosen are YCEEYA and Groupon. YCEEYA is an exclusive business and entrepreneurial platform that focuses on the small business firms and how they can gain growth. The social network helps businesses to connect with similar minded companies to share knowledge and create more visibility. YCEEYA is still very small because of its two-year existence. YCEEYA has to gain more awareness under businesses and create more reach to be influential on an international level (www.influencers.smallbiztrends.com, 2012 & www.meetup.com, 2012).
The second example I address here is Groupon. This market enterprise represents a various amount of businesses that can gain visibility through its popularity and reach. Businesses are able to gratify the demand of the market by spreading promotion advertisements. Without the business network Groupon the companies would not be able to reach their target group or gain more visibility. A downside of Groupon is its bad reputation by broadcasting a provocative promotion during the Super Bowl and deals that were sold but not finished correctly. Groupon has to better its reputation and keep the relationships with the advertising companies tight in order to keep on top of the market and ensure its future (www.meetup.com, 2012 & www.wikipedia.org, 2012).
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Literature list
Borgatti, S.P., Mehra, A., Bras, D.J. & Labianca, G. 2009. Network Analysis in the Social Sciences. Science 323(5916) 892-895.
Boyd, D.M. & Ellison, N.B. 2007. Social network sites: Definition, history, and scholarship. Journal of Computer-Mediated Communication 13(1) 210-230.
Kauffman R.J., Li, T. & Heck, E. 2010. Business network-based value creation in electronic commerce. International Journal of Electronic Commerce 15(1) 111-142.
http://influencers.smallbiztrends.com/small-business-vendors-2012/yceeya-network/
http://nl.wikipedia.org/wiki/Groupon
Megan van der Staak
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