Creating networks and Network lifecycle of Finnish companies on the Russian market as means of improving client orientation. Ekaterina Buzulukova

Investigation plan Introduction Objectives Profiling networks Network lifecycle Peculiarities of network lifecycle of Finnish companies on the Russian market Russian specific Conclusion

Networks models Achrol (1997) Internal market networks, Vertical Market Networks (Marketing Channel Networks), Intermarket Networks (Concentric Networks), opportunity networks Castells (1996) de Man 2004 Quasi-integration networks, Supply (and demand or customer) oriented networks (Vertical networks, Solution networks), Technology oriented networks (R&D networks, Standardization networks) Moller, 2007 Current business Nets (Vertical demand-supply nets, Horizontal market nets), Business renewal nets (business renewal nets, customer solution nets), Emerging business nets (application nets, dominant design nets, innovation networks)

Base network model Supply chain (Process oriented) Hub and Spoke (main contractor) Peer-to-peer (Project oriented) Loh H., Zhang C., Katzy B Virtual organization – system and practice, Katzy B., Zhang C., Loh H., 2003 Reference models for Virtual Organization

Team building process and common process of forming networks Adaptation Grouping Cooperation Group rules and norms Functioning

Types Clarifying Supply chainHub and SpokePeer-to-peer Control flows, responsibilities, power relationships and decision making High level of interdependency, high specialization, Client or supplier control Main contractor control and coordination Companies autonomy, flexibility, common management Information flowsFrom Client or supplierInformation flows focuses on main contractor and he distributes them between companies Active information interchange Material flowsFrom companies on previous production phase Main contractor buy wholesale and allocate them between partners Resources interchange, efficient resource allocation Monetary flowsDuals paymentsAccumulated by main contractor According to adreement

Network lifecycle

Lifecycle specific for each type of network Supply chainHub and SpokePeer-to-peer Creation (common interest, glue, searching partners Operating (control, material, finance, information) Evolution (causes, improving performance, changes in structure and responsibilities) Dissolving (causes, future conclusions)

Russian specific 1.Socioeconomic factors 2.Cultural characteristic of doing business in Russia 3.Partners searching and forming networks with Russian companies 4.Risks 5.Distinguishing features of forming networks of Finnish companies on the Russian market

Research methodology Object: Finnish construction companies on the Russian market Sample: 13 companies, 3 interviews with top managers Method: qualitative investigation - face-to-face interviews Data handling – analytical report

Assumed results 1.Choosing network model and its visualization 2.Exposure lifecycle phases and theirs peculiarities for each type of network 3.Distinguishing features of creating networks of Finnish companies on the Russian market. 4.Critical factors of doing business in Russia 5. Network as crucial factor improving client orientation and base for forming sustainable strategic advantage

Practical benefits Advantages of network performance Critical factors of doing business in Russia Choosing type of network and its crucial characteristics (control, responsibilities, material and information flows) Characteristic of process creation network in Russia and its consistency

Questions Types 1. Network description Description of the network structure, objectives, vision and strategies Collecting information about involved organizations Collecting information about past experience of network operating (control, material, finance and information flows) Collecting customers feedback 2. Creating networks on the Finnish market (steps and peculiarities) 3. Network lifecycle in Finland 4. Entrance strategy in Russia 5. Creating networks in Russia (searching partners, barriers, peculiarities and complexity) 6. Critical factors of doing business in Russia 7. Assumed lifecycle of networks in Russia 8. How network helps to gain sustainable competitive advantage

Stroi Network Project Thank you for your attention

Questions Please, justify steps of creating networks and relationships building on the new market. Are there are any cultural differences in these steps or their consistency? Describe please the process of entering the market and creating networks in Russia. Was this process more difficult than in others countries? Why? Identify the key characteristics of ideal partner in network. What is, from your point of view, main feature need to be the best partner? Can be a Russian company a real partner? What are prevented factors from long-term relationships with Russian company? What is the shortest way of developing successful relationships in Russian market? How to reach the mutually beneficial relationships? What are possible successes and losses? How does company seek for new partners? What criteria are used for this search? Does the company have a structured program or policy in place for this purpose? What are risk factors in Russia? How to evaluate the importance and impact of threats? How to overcome difficulties and to create defense from the macroenvironment threats? What is the role of key people in creating networks and sustainable relationships? How can one find them? What are the factors of strengthening mutual trust and interpersonal relationships? How to overcome cultural differences?