Going beyond customers - a business segmentation approach using network pictures to identify network segments
Existing approaches to segmentation, in particular business segmentation, are often conceptualized and applied in a limiting way, providing a narrow interpretation of the surrounding business network. This could be attributed to a rather myopic view of the multiple complexities and indirect links inherent in networks of business exchange relationships. The task for companies developing innovative segmentation approaches is to simultaneously enhance the company’s understanding of downstream as well as upstream preferences and resources, while going beyond immediate interaction partners to include relevant indirect business partners. The challenge is therefore not to identify attractive customer segments, but attractive network segments. As such, the managerial challenge becomes one of creating a business network segmentation from the perspective of a focal company within this network, taking a far wider interpretation of the concept of segmentation. Using the concept of network pictures, we outline the different dimensions that are important within a business network segmentation, and exemplify their use through a case study of an entrepreneurial company. Our study contributes to the literature by providing a detailed example of a practical application of abstract concepts, in this case the translation of the network picture concept into a way to apply a business network segmentation to an entrepreneurial context.