Why Business Networks Are Important?

supply chain management

“Call it a clan, call it a network, call it a tribe, call it a family. Whatever you call it, whoever you are, you need one.”

-Jane Howard

Business Networks are important to accelerate and sustain success for any individual or organization. It is imperative to learn from the evolution and success of business networks. Business structures have evolved radically to such a degree that nowadays, most businesses have no option but to create business networks.

Business Networks are more important than your business infrastructure

Naturally your business infrastructure is fixed, rigid and cost accruing. Your business networks, on the other hand, are evolutionary, flexible and revenue accruing.

Business Networks make your business more resilient and responsive – at the same time.

Those businesses which had the most responsive and resilient business networks were the ones to recover from any downfall the quickest. See who survived the global economic downturn during 2008 – 2009.

When Cash is the King – Business Networks Triumph

Data is visibly conclusive that in times of cash crisis, the quality of their business networks saves companies. Those with more robust business networks have far more superior cash conversion cycles, nearly 6 times better. In fact, as pointed out by Aberdeen Group, business network masters improve their cash to cash cycle leading up to the Global Financial Crisis while the rest of the industry went backwards.

In boom times Business Networks Give You Speed

Even relatively smaller businesses can achieve remarkable results quickly based on the responsiveness of their business networks. In economic booms, whether accompanied by economic volatility, or economic stability, business networks allow you to realize higher profits, quickly. The potential of your company’s capabilities are multiplied many times over, by the leverage effect provided by your business network. This is only possible through extensive utilization of business networks that the company has built, nurtured and managed effectively. Most executives grossly under-estimate the value and efficacy of business networks in ramping up capacity rapidly in boom times.

Business Networks Help Smooth out Volatility

Especially during times of extreme volatility, we see airlines and shipping companies forming global service alliances to ride out the season and economic peaks and troughs. In such volatile business environments, budgeting and planning can become a nerve-racking exercise for all companies except those which use their business networks to cushion the lean periods with long term contracts and find scarce capacity during boom periods. Supply chain is unique to every company and industry, formulated over a number of decades in many cases, and is worth several trillions of dollars in value.

Valuation of Business Networks is Astronomical, Though Difficult to Quantify

Estimates range into trillions of dollars, and yet may be underestimating the full extent and power of these hidden business resources. The magic of business networks has made it possible to design, build, launch and sell revolutionary products in less than one-third time of the industry. If you cannot make your business networks more visible and manage them more proactively, you may be silently yielding the competitive advantage to others who can. It is, after all, the obtainable magic.

Want to start now? Create your own 5-Star Business Network today.

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Vivek Sood

  • John says:

    Here are my inputs- Network is important because Networking is the single most powerful marketing tactic to accelerate and sustain success for any individual or organization.

    Building a successful business takes a lot of time and dedication, so it is sensible to have a network of business partners and associates to draw energy from and keep you motivated. By surrounding yourself with people who share a similar passion and determination, you are more likely to move forward and achieve results. Business networking is a really valuable way to expand your knowledge, learn from the success of others, get new clients and tell others about your business.

  • marlian says:

    Business networking is a really valuable way to expand your knowledge, learn from the success of others, get new clients and tell others about your business. A strong and active business network has advantages that can make your business grow and flourish. It is expected that networking will result in opportunities.

  • serlinda Brank says:

    Business networking is a really valuable way to expand your knowledge, learn from the success of others, get new clients and tell others about your business. A strong and active business network has advantages that can make your business grow and flourish. It is expected that networking will result in opportunities.

    One thing I would like to ask you regarding business network leads.

    Are you attending networking events and not generating any business leads?

    When you go to a networking event, your conversations will be a lot more fruitful if you ask better questions than the standard, run-of-the-mill “What do you do?”, “How’s business?”, “What have you been up to?” Such questions aren’t necessarily bad and I’m not saying don’t ask them, but it really doesn’t leave you much room to maneuver after you’ve both have answered them.

  • elavo says:

    It can help you start your own business and climb the career ladder.
    Networking is fun, enriching, career-enhancing and thought-provoking. But most of you already know this. To those of you that prefer to keep to yourselves: gear up your engines, as we are about to give you five reasons why networking matters.

    Networking can help you climb the career ladder
    While not all students think of starting their own business, some choose to work for others and make a robust career. You can easily talk to people and gauge different career opportunities in order to climb up the career ladder, and there is no better place to do it other than your MBA classroom. You may not meet a person working for the same company as you across the border, but you are definitely bound to meet people who are working in the same industry or in an industry that you are interested in. They can tell you about companies you didn’t even know existed, opportunities at companies you did know existed, but could never learn about from open channels, or even some tips on landing a job in the industry, you thought you knew, but ultimately didn’t.

    And if that is too confusing to you, try grasping public-private funding of space exploration! Come to think of it, networking could probably help with that, too. After all, Elon Musk met all kinds of people at the University of Pennsylvania and Stanford, which inspired him to found SpaceX later in his life…(https://bit.ly/2IIxxNs)

  • CEO Supply Chain says:

    No matter what industry you’re in, networking is always a good idea for business professionals wishing to build relationships and grow their influence. Remember all that networking has to offer the next time you restock your business cards and share them with new connections! By growing your network, opportunities arise, business partners appear, connections are made and trust is garnered in the local community. Here are just a few of the reasons networking is so crucial to success.

  • Gleb Anderson says:

    Could I adopt business network in my business?

    As I read this blog, It is showing benefits of business network like we can grow faster in business boom time. How can I adopt it for my IT solution business?

    Is it beneficial for me also to grow my business?

    • Vivek Sood says:

      Very much so. What do you think of the relationship between hardware vendors and software vendors is? Now add multiple vendors for each these two – and imagine the B2B network surrounding a typical large corporation. A company I know has more than 500 software vendors.

      Even a small household today will have dozens (including apps perhaps hundred or more)!

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