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The Evolution And Revolution Of Business Networks

As technology continues to progress and become more advanced, it is no coincidence that business networks grow accordingly. This article talks a little bit of the history of business, such as how “leaders realized that a single chain – like a line of thread – can be easily broken, and a framework of many chains interwoven into the fabric of business is much more stable” (Forbes). Technology is crucial to the expansion of business because of the possibilities it provides; communication is on a larger scale and must faster. However, just as technology is beneficial to business, it can also be a double edged sword; often companies that fail to adapt to technology fast enough are no longer able to maintain a competitive edge. Only by evolving – and growing their network – can a company hope to succeed in the fast-paced society we live in today.

To translate this evolution into graphs, the original single chain would simply be a line of nodes with two edges each, save for the start and end nodes. Since each node is only connected to two others, it is easy to see how if one edge is removed, the chain can no longer be completed, describing how easy it would be to break the chain of business. This is a very primitive network, where each node really only has a direct relationship with its immediate neighbors. For example, if the nodes representing transportation and retail were broken, the entire chain would be unable to function, and this would affect everything from producers to consumers. In contrast, the current model of business, the framework of many chains, describes several of these two edge node chains interconnected. This way, if an edge is removed, there are other edges that are still able to complete the network, minimizing and mitigating the potential damage that could be caused. This is a much stronger and safer network in comparison to the single chain, and by using graphs, we glean a greater visual understanding and can clearly see why this is a preferred method to do business.

The article also touches upon how companies that are much more collaborative with their consumers, producers, and partners also tend to be vastly more successful. Using a graphical representation, companies with these greater collaborative relationships would also tend to have stronger and more relationships than companies who do not. We can see that businesses with stronger, more intricate networks will always do better than businesses with underdeveloped networks using this graphical representation, which reinforces the importance of building networks. This is because stronger connections (or edges) are harder to break or be removed. A smaller probability of the network breaking leads to a healthier and stronger network. With the property of strong triadic closure, we know a stronger edge between two nodes means it is more likely for edges to be formed between these nodes and other nodes they have strong relationships with. From a business standpoint, this could translate to a greater chance of satisfied customers recommending this company to their friends, which will increase the amount of customers. With graphs, we can often gain a greater understanding of how businesses function and how they are successful. This is a powerful tool and really illustrates the importance of networks.

Article: http://www.forbes.com/sites/sap/2015/09/02/the-evolution-and-revolution-of-business-networks/

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