ACCA SBL Syllabus C. Strategy - Value Network - Notes ^{6 / 8}

As well as managing its own value chain, a firm can get a competitive advantage by managing its relationships with the value chains of its suppliers and customers too

So, an organisation's value chain is not just internal but also connected to others externally - in what we call a value network

'The value network is the set of inter-organisational links and relationships that are necessary to
create a product or service.’ Johnson et al, 2017)

Its not just a supply chain - the VALUE Network emphasises on the VALUE-creating ability of  the supply chain processes.

A Restaurant

A great chef needs great ingredients (supply chain). So the ingredient grower adds value

Large organisations (think 5 forces) can exercise power over suppliers through their bargaining power

But it's not just all about driving down the price - relationships in the value network need to be managed carefully in order to promote innovation and create knowledge between the organisations.