Collaborative Networks: Challenges for SMEs

Collaborative Networks: Challenges for SMEs

Kathryn Cormican (National University of Ireland, Ireland)
Copyright: © 2011 |Pages: 16
DOI: 10.4018/978-1-60960-463-9.ch010
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Abstract

The business landscape has changed dramatically in recent years. Innovative organisations are restructuring their business models. They are moving away from discrete linear value chains towards open innovation models such as networks. Small to Medium Sized Enterprises (SMEs) recognise that in order to survive they must be equipped with the relevant competencies required to design, develop and deploy innovative solutions that meet the needs of the end user. More and more small firms are collaborating with each other in order to create value added products and access new markets. However, the task of working in a collaborative network is not easy. SMEs find it particularly difficult to engage in these activities and experience many challenges in this regard. Moreover, there are very few support structures and systems available to guide successful knowledge sharing and collaboration. This chapter explores the fundamental concepts of collaborative networks and knowledge sharing, synthesises and presents some of the challenges faced by SMEs and identifies some critical success factors that should be considered to help overcome the barriers identified.
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The Networked Enterprise

Traditionally organisations competed across linear supply chains (see Figure 1). These supply chains focused on improving the efficiency and effectiveness of existing product/market combinations. However the business landscape has changed dramatically in recent years. Innovation is radical, product life cycles are shortening, customers are more discerning and prices and margins are falling. Organisations must seek not fractional but exponential levels of improvement to survive. Consequently, progressive organisations are restructuring and reconfiguring their business models. They are moving away from discrete linear supply chains towards value networks. These emerging structures (see Figure 2) seek to support open innovation models by sharing competencies and resources and optimising linkages and relationships.

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