What is a Value NetWork?

A value network is a system that organizations, departments, operating units or people use to do work, buy or sell products, or create plans that benefit the entire organization.

How Does a Value NetWork Work?

Research and development units, for example, are key components of many companies' value networks. By working with government agencies for grant funding or approvals, third-party vendors for supplies and talent, and internal marketing or development teams, the R&D department creates new goods and services that make more money for the company, help cure diseases or other social problems, and foster the growth of the third-party vendors. This is a value network.

Why Does a Value NetWork Matter?

A value network is like an ecosystem, and many analysts even map them out for presentation. Value networks contain many symbiotic relationships in which the participants all benefit in some way from their participation in the network. Similarly, if one part of the value network is weak, the rest of the network may suffer.