Strategic response in fragmented networks

Abstract

Information explosion, globalisation and the reduction of trade barriers have led to the emergence of global production markets and broader access to a range of products for customers. For manufacturers this has led to managing fragmented networks to deal with more polarised markets with wider variety of products at reduced costs and shorter lifecycles in an increasingly competitive environment. This coupled with the pressure to create shareholder value calls for a dynamic approach in the design and management of their supply chains. Market responsiveness is ability to anticipate and react purposefully within appropriate timescale to changes in the market place in order to maximise shareholder value and customer value. The aim of this research is to develop a model for market responsiveness that will enable organisations to deal with the changing needs of the market. To achieve this aim the research methodology was designed to primarily collect qualitative evidence from three distinct supply chains within different industrial contexts. Contrasting across these contexts has helped to determine if the model is generic enough to be applicable in other contexts. The findings were that value gaps exist between interfaces within organisations and their supply chains. At such gaps value is either created, maintained or lost. Value gaps are the primary reasons why organisational tensions exist as the entities involved are focused on conflicting strategic objectives that lead to behavioural misalignment and ultimately poor response. Therefore the research concludes within a market responsiveness model within which there are frameworks for business performance management and managing the value execution point of which maximum shareholder value and customer value can be created.