QUESTION

Based on your preliminary work, now you are required to write a research paper to show any network-related elements in two organizations and to differentiate the usage of networks between two different types of organisations.

You can organise your research paper in the following format:

• Title (you are required to decide your paper’s title)
• Your name and student number
• Abstract (about 100 words)
• Introduction
• Body context (you could divide into several sub-sections if required)
• Conclusion
• References.

The word-count limit for this paper is set at about 3000 words (including diagrams and references).

Assignment 3

Research proposal 2

Further on your previous work, now you are required to write a research paper to address how two selected organizations to get their business gains by adopting new networking technologies or/and management improvements which you recommend for them.

You can organise your research paper in the following format:

• Title (you are required to decide your paper’s title)
• Your name and student number
• Abstract (about 100 words)
• Introduction
• Body context (you could divide into several sub-sections if required)
• Conclusion
• References.

The word-count limit for this paper is set at about 3000 words (including diagrams and references).

SOLUTION

ABSTRACT

The main aim of this research paper is to gather all the information about the network-related elements existing in two organisations from different sectors. Like here for this research, we have chosen ‘Starbucks’ from the speciality coffee sector and ‘IKEA’ from the retail industry. Then we will try to find out how the usage of networks is different in Starbucks is different from that in IKEA.  Networks are the best way to find the irregularities and kind of patterns existing between the individual relationships in any organisation. With the help of Model for managing networks we will also find how they can improve their networking and organisational efficiency.

INTRODUCTION

This Research paper is mainly focussed on various kinds of multiple social networks existing in any organisations. We will study the network-related elements existing in two organisations namely Starbucks and IKEA. Relationships between individuals in any organisation take the form of patterns and irregularities which can be best analysed with the help of Networks. Centrally formed and firm network structures give rise to multiple kinds of designs within relationships. In the past decade more research has been done on networks in the areas of defence applications, including the organisational networks, but the main focus has been on human social networks existing in several areas like public health, biology, internet etc.

Significance of the Network

A Network comprises of companies and relationship exists between them, but network is not restricted to just the small set of companies with which it deals or the conies that they have any association with. Nor does a network consist a set of companies with which it has some kind of informal or formal agreement related to mutual co-operation. However in the managerial literature the network is still defined as the set of other companies which eth single organisation either knows, deals with or can think of. Such kind of view creates an illusion that the single company then takes the controls the whole network.

It is found that it is difficult to define or demarcate the network which surrounds the company. Network does not even have any objective boundaries too and eth contents of the network get affected by the starting point for a particular analysis and the main purpose of that analysis. Networks do not have any boundaries and if there is one existing then it is supposed to be artificial. Thus the results of actions of any particular company are not just related to that company rather they are due to collective effort of the network.

Rather it has been found that all the actors which are involved in any specific matter within the network will portray their own and entirely different kind of “picture” of the network. These “pictures” are supposed to be the perceptions of the things happening around, their actions and their reactions within that particular network. Thus “Network Pictures play vital role in managing networks for any organisation (Ford et al., n.d.).

Figure 1 shown below depicts the Model for managing Networks in any organisation

Figure 1: Model for managing network

Characteristics of Networks

Before analysing the networks management models we will try to find the basic characteristics of Networks in business which will affect it while managing it. Some of the basic characteristics of business networks are listed below:

1. Problems ,relations and Solutions
2. Interdependence and Limits to judgment.
3. Incompleteness

Networking elements in IKEA

Every year IKEA is supposed to get made around 100 million copies of its retailing catalogue which needs huge amount of paper approximately 40,000 tonnes of paper is needed every year for catalogues. IKEA analysed that with growing environmental concerns its customers were also becoming conscious about environment, so it decided to portray an environmentally responsive image through IKEA catalogues. It found that to demonstrate their attentiveness for environment catalogue would be the best idea so in the early 1990’s , they started examining and considered that ‘green’ paper would be the best one for their catalogues and this whole process needed IKEA to do networking at some level within organisation (Hakansson and Waluszewski, 2002).

Networking elements Found at Starbucks

Starbucks has a feather in its cap for revolutionising the  coffee industry and which simultaneously lead to higher growth rates and gave it desired success worldwide (Michelli, 2007) and this has been done through making coffee drinking a special experience . It was done by Starbucks by creating a special connection between the partners and its consumers which developed into an emotional bondage which developed between the customer and the brand Starbucks.

The social networking followed by Starbucks follows the Flock Theory and according to this theory the dynamics of flocks is such that they form clusters of consumers who are bound to flow a particular kind of flow related to innovation. These flocks have been divided into 6 groups which form their own network (McCracken, 2006).

Flock 1: Early adaptors which can embrace any change very quickly. They have high risk bearing tendency and are thoroughly devoted to the trend or innovation. They always desire for something sheer new and fresh.

Flock 2: The group of consumers who will try out any product or service which has been in the market for quite sometime. So their risk bearing capacity is lower than that of Flock 1.

Thus the flocks keep in changing till we reach the last flock that is:

Flock 5: They are no risk taking consumers. They will buy something which Flock 1 had already bought. Thus all the flocks have the tendency to follow each other.

DIRECTION OF PROGRESS

Figure 2: Flocks and Flow within Continuum

Source (McCracken, 2006)

AS said by Holt (Holt, 2004) it has been found that the consumers of iconic brands like Starbucks show loyalty not because of their one-to-one relationship with the associated brand as claimed by the emotional paradigms (Gobé, 2001) (Michelli, 2007), but they show loyalty because they are locked within the social mechanism which is also referred to as ‘social network of the brand”. The mechanism which is responsible for determining the level of brand loyalty of the consumer divides them into three parts:

Insiders

 Followers

 Feeders

All these together form the social network for the brand like Starbucks (Nielsen and Mortensen, n.d.).

Network Pictures

The views which are held by the participants of that network within that particular network are called Network Pictures. However there is not any objective and single network which exists (Ramos, 2008). Every company and the individual who is part of that network will perceive and portray totally different network picture with reference to characteristics, extent and content of the network. Everyone’s network picture is being influenced by their position, experience and relationships in the network and gets influenced by the uncertainties and capabilities, limited knowledge and thoughtfulness, and problems (Ford David et al., 1998).

“Types” of Networks in IKEA

There are no types of networks which exist it is just the different perspectives which exist for different people. Like in case of IKEA the paper producers depicted a clear stereotypical picture of network for IKEA as the paper producers played the role of dominant actor here. They were the ones who decided that what kind of paper should be produced for catalogue. Existing production structure was the influencing factor for these choice made by paper producers. According to them the strength, brightness of the paper along with run-ability (concerned with printing) were the factors which influenced the requirements of the users. While IKEA perceived a different network picture and their network picture seemed to be wider one because of being closer to the   ultimate consumer and they found that the consumers have shown significant interest in environmental related matters. IKEA was definite that consumer wanted ‘Green’ Paper.

AN environmental policy was being formulated by IKEA which said that the catalogue manufactured for it should contain paper which should be based on TCF (Total Chlorine Free) pulp along with 10% co0nstituent of recycled fibres.

The main reaction from the primary producer and supplier of paper to IKEA that is Haindl, a German producer was sheer refusal. Since at that time there were just few producers of TCF free pulp paper in Europe and not even a single producer who can make a catalogue with recycled fibres. SO IKEA had only option to start mobilising various paper producers in several other countries along with the suppliers of specialised chemicals and equipments. Thus in order to find a viable solution IKEA had to expand its network picture.

Three Aspects of networking

The three aspects of networking is concerned with the options which managers have related to any organisation and covers the three paradoxes of network (Hakansson and Ford, 2002).

• First Aspect Of networking: Choices existing within already present relationships and it helps in deciding when to confront and when to conform within existing relationships. Like IKEA first spoke to its existing supplier about its demand, when they could not conform to their requirements they chose another supplier. Haindl knew that even if they tried to fulfil IKEA’s demand they will have to upset other important German clients as even they would; like to portray environmental friendly image, so Haindl never wanted to confront these clients.
• Second Aspect of Networking:  Choices about Position: This means the company has the choice to decide when to consolidate and strengthen its existing position in the network or when to create a new position in the existing network or develop a new relationship in the network.

IKEA has been the largest buyer of Haindl, but it had to change its position in network now to fulfil its new demand and moreover IKEA offered its 8-10 largest printers in Europe to be used by eth required paper suppliers for testing paper and use them for printing. Thus the existing relationship with the printers was used by IKEA to market itself to the new suppliers. It also had the benefit of getting to know the issues which are involved in paper-making in better manner. Thus IKEA got what it wanted in the form of new paper and ran into the third aspect of networking too.

• Third Aspect of Networking: Choices regarding how to network: The organisation knows when to coerce the other participants to work according to their wish and when to concede to the wishes of the participants and the initiatives of other organisation.

IKEA managed to get two Finnish and an Italian supplier, who had initially production difficulties regarding adding recycled material to the paper and they had to import the recycled material also. SO the waste was shipped back to Germany and U.K.  And then it was added with the pulp. Thus Springer saw that the cost of production was increasing too much. So they introduced the “good forestry” as another fresh demand. So now IKEA had to concede according to the new specifications of the environment friendly paper and it accepted the paper with lower specifics.

Know the Networking Formula of Starbucks

The Twitter fan base of Starbucks is found to be 705, 000 followers and more than 5, 428,000 fan following in Facebook. This clearly indicates that the social media networking of Starbucks is really working well. Here is a brief analysis of what’s different about the Social Media networking which Starbucks does to get this success.

Source: https://www.blonde20.com/blog/wp-content/uploads/2010/01/starbucks-logo.jpg

1. Starbucks is on Twitter: It creates an engaging platform with its customers on Twitter by retweeting to the opinions posted by people about brand and answering their questions. This creates an open channel of communication with the public.
2.  Starbucks Facebook Platform: Starbucks regularly takes time to update its Facebook page with latest videos, pictures, blog posts. It also sends invites to people through facebook to participate in various events sponsored by Starbucks. The Starbucks fans are free to express their opinions and go for discussions on their Facebook page and pass comment also (Noff, 2011).
3.  Starbucks YouTube stint:  the YouTube Channel of Starbucks is being subscribed by around 4800 people. The videos uploaded on YouTube are commercial advertisements of Starbucks or informational videos about origin of different types of coffee blends and some videos are related to their charity and social work done to help society. The history of Starbucks is being described in some videos, thus Starbucks can relate to the origin of brand. It also allows the users to embed their videos on the YouTube Starbucks channel. This is not allowed by many organisations, because they fear that their videos might land up on sites with which they would never want to get associated with. But this strategy of networking adopted by Starbucks and the organisations like Dell has worked in positive manner for them which allow the users to embed their videos.
4. My Starbucks Idea:  This is private social networking created by Starbucks where the consumers can share their ideas and opinions related to Starbucks coffee experience. This My Starbucks Idea strategy adopted by Starbucks works really well for them as the consumers who are part of this social network of Starbucks feel that they are given the opportunity in taking part in decision making at Starbucks.
5.  Starbucks Blog: The blog of Starbucks exclusively entitled as “ideas in Action” is mainly constituted by the employees of Starbucks who keep their users posted and updated about what is happening with the ideas given by the users. This helps in enhancing their sense of loyalty and the consumers stay connected with the company through this exclusive blog (Noff, 2011).

This indicates that the social media strategy of Starbucks is a perfect integration of several elements of networking to create a perfect and effective social media plan which helps in creating millions of Starbucks fans across the globe and to keep the Starbucks users involved in the decision making process and the doings of the Starbucks brand. This digital dialogue created with its users helps the fan to give their feedback and simultaneously get a prompt response back from Starbucks too. This shows the consumers of Starbucks that they are being cared for and heard too (Noff, 2011) .

Know the networking Formula at IKEA

IKEA uses social networking and it also taps the social media networks like Facebook and other social media networks. A new store was opened in Sweden of IKEA way back in 2009. On their page for IKEA showroom owner they posted the snapshots of the new IKEA showroom online. The contest was created which involved the potential consumers by asking them to tag themselves in those pictures and the one who tagged themselves first would win an IKEA product. This campaign was handled in the very best manner and gave the desired advertising and campaign to the new IKEA store in Sweden. It was not just that store but the whole brand of IKEA gained popularity at the end as it got into the social media network. The best part was that they did not have to pay for such campaign and this free website was promoted using their pre-existing resources. Thus IKEA used the powerful networking tool of social media to build their brand recognition and to gain business benefits (IKEA Uses Social Networking to Promote Store Opening in Sweden, 2011).

Usage of networks in Starbucks and IKEA

From the above illustrations and research it is quite evident that both Starbucks and IKEA have been using the social media network in the best possible manner to achieve their targeted benefits. However the exponential success achieved by Starbucks and its creative ideas have been overwhelming in this case. This shows that they have been using the social media and their networks in best possible manner to achieve the targeted benefits and to interact with their customers.

However it must be kept in mind that every social media campaign requires a unique approach which comprises of least number of cookie cutters in it. It should have minimum possible cookie cutter solutions and maximum number of individual and unique concepts and strategies. Thus IKEA cannot follow what Starbucks has been doing. This is the best part of social networking. The concepts adopted by Starbucks can only act as informational pieces and inspiration for other networks or other organisation.

Conclusion

New technologies keep on involving everyday with the help of new networks which keep in evolving with newer and better opportunities. The cutting edge campaigns of Starbucks will start looking older and stale after just few months and will not beget as much success as they are getting now. So the companies need to develop newer networks every few months to evolve and face the stiff competition or to get competitive edge in the market. However it is quite evident from the social networks of Starbucks and IKEA that these networks help more in brand building and help in initiating conversation with the potential or future consumers than boosting sales. Starbucks Facebook page is ranked fourth amongst the topmost popular pages as per a survey done in 2009 with a fan following of 3,123,945 followers (Source: www.facebook.com/ marketing).

The network of the Starbucks clients has been used as the major idea providers by the organisation as the ideas are being posted by the consumers regarding new products and brand on http://mystarbucksidea.com and these suggestions are taken seriously to improve and in building a bond with its consumers. IKEA also tried to do t same by getting the ‘green’ paper catalogue developed which will bring it closer to its consumers who are more environment conscious.

This clearly indicates that integrating the social media networking will help organisations in combining their marketing efforts with the users along with effectual product development too. This helps in cost savings for the organisation, because it helps indirectly in doing market research and helps in strengthening the loyalty of the consumers towards the brand. Thus the organisations need to develop such strategies which can develop interconnectivity between network outcomes and networking at the same time. The strategy should be able to find and develop connection between the present network pictures and the existing network. It should also be able to find out that how the current network picture of the organisation is going to affect its network outcomes (Ford David et al., 1998). This indicates that business strategies are not a simple and liner process of just analysing, developing and implementing in case of any business network. The networks are very complex and very interactive within the organisation and involve action, reaction and simultaneously re-reaction simply on the basis of the network pictures, network outcomes and networking of the organisation.

Bibliography

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Noff, A. (2011) Starbucks’ Formula to Social Media Success, 11 January, [Online], Available: http://www.blonde20.com/blog/2010/01/11/starbucks-formula-to-social-media-success/ [26 March 2012].

Ramos, C. (2008) DEVELOPING NETWORK PICTURES AS A RESEARCH TOOL:CAPTURING THE OUTPUT OF INDIVIDUALS SENSE-MAKING IN ORGANISATIONAL NETWORKS, July, [Online], Available: http://www.impgroup.org/uploads/dissertations/dissertion_37.pdf [26 March 2012].

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