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The Value Net Model provides an alternative view of competition. That is, instead of viewing competition as an impediment to profits, competition can be viewed as a beneficial tool to the organization. Specifically, the value net model encourages organizations to collaborate in order to cover a wider range of the market and bring different perspectives to develop efficient and innovative processes. Industries become more profitable and increase in longevity when organizations within them set it up for long-term success.
Description of Value Net Model
The Value Net Model identifies four direct influences on business success: customers, suppliers, competitors, and complementors, and explains strategies for establishing cooperative and productive relationships with them. It is important to note that one company could potentially take on multiple roles.
- Customers: Individuals who purchase the products or services the organization offers and directly contribute to bottom-line performance. The more customers an organization has, the larger its share of the market will be. It is important for an organization to acquire as many customers as possible.
- Suppliers: These companies are the ones who have the resources that are necessary to produce the organization’s products or services. Maintaining good relationships with these individuals is critical because these individuals have a lot of control over the price and quality of these supplies, which can subsequently influence the price and quality of your organization’s goods. It is also critical to have more than one supplier in the event that one company cannot provide you with the necessary resources.
- Competitors: These individuals are the ones who rival your organization for customers and purchase the same resources from suppliers. While competitors are typically viewed negatively, creating partnerships might actually provide more benefits for both companies. With regard to suppliers, combining orders in order to receive a bulk price will provide both organizations with the same products at a lower cost. With respect to customers, if there is an organization that is more dominant in another state or region, combining forces will help to grow both companies nationally or internationally.
- Complementors: These are organizations that offer products or services that would nicely complement those offered by your company and ultimately create a more desirable product for customers. Therefore, the bottom line for both companies would improve.
Praxie's Online Value Net Model Tools & Templates
Strategy teams that want to develop a true team sense of how they stack up against their competition should look to make use of the new online Value Net Model template from Praxie. The Value Net Model goes one step beyond Porter’s Five Forces Model. That is, instead of simply evaluating the competitive environment, it uses that information to identify a common basis for establishing complementary relationships. The model is usually summarized and presented in document or presentation software but can also come in the form of online cloud-based software to enable greater collaboration. Get started with our Value Net Model template.
How to use it:
- Review the definitions for each of the value net elements.
- Based on your business vision and mission, outline the strategies for each element so you can deliver value to the market and create competitive differentiation.
- Create an action plan for completing your Value Net model.
Unlike most traditional Value Net Model techniques, Praxie’s online Value Net Model tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device.