The Marketing Book 5th Edition

Supplier 1 Supplier 2 Supplier 3

Supplier’s

Supplier 1

Supplier’s

Supplier 2

Competitor 1 Focal company Competitor 2

Customer 2,

Customer 1 Intermediary Customer 3

Customer a Customer b Customer c

162 The Marketing Book

supplier, Competitor 1 in the diagram. Rela-
tionships in the network may affect companies
within the network that they have no direct
contact with. For example, Customer 2
becomes concerned when it hears that a close
relationship has developed between compa-
nies Customer 3 and Competitor 2 in order to
develop a product to specifically satisfy Cus-
tomer c. As Customer c is also one of Cus-
tomer 2’s customers, Customer 2 may initiate
collaboration with the focal company to
develop a product specifically for Customer c
to fend off the competition from Customer 3.
Customer 2’s collaboration with the focal com-
pany may also be beneficial to its other cus-
tomers, a and b.
Networks are made up of actors, the
companies and the individuals within them,
that perform a set of activities using sets of
resources (Hakansson and Johanson, 1992;
Hakansson and Snehota, 1995).

 Actors– In the process of developing activity
links and resource ties, the individuals and
companies interact with each other and actor
bonds are formed. Strong actor bonds
between companies will affect other

companies’ perceptions; for example, a

supplier who has a strong bond with a big

major customer may be able to use the

relationship to acquire the custom of other

companies.

 Activities– The activities refer to the technical,

administrative, commercial and other activities

of a company which become connected to the

other companies as the relationships develop.

The connection and co-ordination of

companies’ activities has provided the basis of

‘just in time’ supply chain management and

‘total quality management’ (Hakansson and

Johanson, 1992; Hakansson and Snehota,

1995).

 Resources– Each company has its own set of

resources, including manpower, equipment,

plant, financial means etc., and relationships

often provide a means of accessing resources

which may have been unavailable to them

previously. In addition, companies not only

bring their own resources to relationships,

they often invest in each other to create, build

or acquire resources. New resource

combinations are likely to arise as the

companies develop and invest in a relationship,

leading to new business opportunities.

Figure 7.4 Interconnected relationships in a simplified network.