Niches and Networks: Prospects for Strategic Analysis

The network characteristic of markets has been widely recognized by a number of researchers particularly in the field of Organizational Buyer Behavior and Industry Innovation. An analogous development in Industrial Economics and micro economic analysis is the recognition of the relationship between the various value adding stages of production and the role of intermediaries in the overall industry structure.This widespread recognition of the greater complexity of both producer and market organization has, however, posed severe problems for analysis at the level of both the individual firm and also public policy. In the former case there has developed an espousal of so-called 'niche' strategies for firms whilst in the later case the realities of market organization are often ignored in the general notion of the 'free' market. The complexity of the data requires powerful forms of analysis that can address such issues in a more systematic manner, and yet most current attempts fail to reveal new insights or taxonomies for the network structures that are observed. This paper proposes a closer evaluation of the particular problems of network analysis to indicate what form such analysis might take and how it might be translated into a strategy framework. Such a development provides the opportunity for a critical appraisal of some current examples of empirical work in this area as well as indicating the sorts of questions and issues that the new forms of analysis might address. A number of these questions are seen as critical to developing a more market-based method for strategy evaluation in such contexts.