Industry Networks

Understanding how industries are structured from a network perspective can help generate effective strategies and identify specific opportunities for innovation

The complex array of relationships between organizations in and adjacent to an industry define the current landscape of value creation. Analyzing these industry networks can provide direct input into strategic innovation and opportunity identification.

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Example: Media Industry Networks 2006
Source: Laurie Lock Lee, Optimice

Examples of Industry Network Analysis

Industry network analysis can be applied in a wide variety of ways.

Corporate strategy development
The traditional “value chain” analysis undertaken by many strategy consultants is dated and often misleading. In a highly interconnected world, industry analysis that focuses on networks can provide a variety of valuable insights into industry value creation, competition, emerging opportunities, and strategic options.

Strategic innovation workshops
One of the most powerful tools for an in-house innovation program is to use industry networks to identify opportunities. Staff are guided in a workshop to map out the key relationships in their industry, overlay critical trends such as the impact of information technologies, and use this to pinpoint where new value creation opportunities are likely to emerge in their industry. From this, specific innovations can be proposed to generate value for the firm.

Alliance strategy
Industry network analysis provides one of the most pertinent views into the alliances that will be most valuable to support the organization’s objectives, and how best to manage those relationships in an industry context.