Service Value Networks: from Theory to Practice

Smart business networks are built on Service Value Networks (SVNs) across the business's interaction environment. SVNs are constructed via interconnecting and networked value chains linking suppliers, peripheral partners and external support or legislated external sources into the networked internal business cells including executive strategy, target marketing, innovation, operations, IT/web communications and economic value (Hamilton, 2005, 2006). The upstream business cells and their front-end customer interactors are deigned to ultimately generate a customer exchange. Hence the SVN extends beyond the business environment and into the realm of the customer. The customer exchange is driven by customer perceptions, and these in turn are driven by the local and global external environmental including politicaillegislative, economic, socio-cultural, technological, legal and environmental drivers (Johnston et ai, 2005). The business and its integrated networks is also affected by the same local and global externals, as is the final business-customer encounter and exchange. Understanding the SVN components presents a mechanism that may increase the likelihood of generating a business-customer encounter and a successful exchange. This exchange may be a physical and/or services exchange, andlor an information and/or ideas exchange. To the business this encounter is in effect a trade, and as a result, the business targets acquiring an economic exchange that will ultimately deliver a net positive economic outcome, and hence is the focus of this study. This study employs SVNs an approach conceived and developed by the author. It uses the author's SVN theoretical approach to develop a front-end business cells approach from which measurements of the SVN may be developed, develops a means to capture data that enables modelling the business-customer encounter of SVNs, and offers a procedure emploYfible across the entire SVN at a business or industry-wide level. It also develops a Structured Equation Modeling (SEM) method to highlight business-customer interaction pathways, and offers this process as a means to provide additional tools to further pursue the targeting of enhanced business-customer encounter alignment ultimately delivering a more aligned full SVN system, that is capable of delivering win win, business-customer solutions This study unfolds the complexities of the real service industry business and its SVN type interactions at the frontend business to customer exchange interface. This business-customer encounter interface may be measured, and modelled, and may defIne, elucidate and measure the relevant business-customer encounter pathways for the service industry investigated. Targeting the key measures connecting business cell interactors and their pathways to customer value delivers a specifically and customer targeted SVN that if effectively mined may deliver a truly smart business network.