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J. of the Acad. Mark. Sci. (2011) 39:484491 DOI 10.1007/s11747-010-0235-0
Markets as networks: implications for strategy-making
Jan Johanson & Jan-Erik Vahlne
Received: 2 November 2010 /Accepted: 4 November 2010 /Published online: 23 November 2010 # Academy of Marketing Science 2010
Abstract Based on empirical studies of firm exchange activities in business markets, this paper outlines a business network view of the firm-market relationship, which differs fundamentally from the view assumed by neo-classical economic theory. We define business networks as sets of connected business relationships. Thus business relationships and connections between relationships are the critical elements in the business network view. It is assumed, as suggested by the Uppsala internationalization process model, that an interplay between knowledge and commitment development is the mechanism that drives the relationship and network development process. Against this background the paper discusses how strategic change is analyzed in literature on alliances and networks. In conclusion the paper presents a set of propositions about strategy-making in business network settings.
Keywords Business networks . Business relationships .
Learning . Commitment . Strategic change . Strategy-making
Introduction
Although the market environment is of central concern for management of business firms, we find very few discussions of market conceptualizations in the literature on strategy and international business. Even in marketing,
market conceptualizations are almost absent (Weitz and Wensley 2002); the neo-classical economic theorys view of markets dominates. This is somewhat surprising as the role of the market concept in studies of firms is to get an understanding of the specific business firms exchange conditions, while the main role of economists use of the market concept is to explain production and price levels in the economy. For the neo-classical economists the market is not an empirical reality but a set of assumptions explaining conditions for production (Stigler 1968). Thus, Demsetz (1992, p. 6) argued that markets were empirically empty conceptualizations of the forums in which exchange costlessly took place. Friedman (1953) stressed, however, that the realism of assumptions is irrelevant when evaluating a theory. The value of the theory depends on the predictions generated by the assumptions. For studies of specific business firms, however, we cannot be satisfied with viewing market exchange as assumptions. Relevance for business management must be based on empirical reality. Rather...