Sunday, April 8, 2012

Network Effect

Humans, for the most part, seek out networks. We use social networks, not only online, but offline. We connect with other students, coworkers, friends, parents of our children's friends, etc.
It is not odd that we would also create networks in our business lives.

The grocery store I work at has established a gas station network, not only do our gas stations accept our rewards cards, but we have branched out to two other chains of gas stations to create a network of gas stations where our customers can receive a discount on gas if they buy groceries from us. The store itself is also part of a bigger network, it is part of a chain of stores here in Arizona and the chain is owned by a corporation that owns various chains of grocery and other stores throughout the country.

As an employee of this store, I get discounts on various goods and services from not only our corporate owned conglomeration, but also from other providers who are connected to our corporate or local chain by various means. This gives us employees many opportunities to save money on things such as cell phone service, sports events, and theme parks. This network serves as a benefit to employees which helps serve as an incentive to work or continue working for this store.

3 comments:

  1. I probably shop at the store you are referring to. At one ubiquitous gas station/convenience store it will scan my shoppers card from that store to see if I have built up any points to use toward gas. I guess I don't buy enough groceries there because it never helps me out with gas. But I bet the first time I actually see some gas savings I'll move closer to lock-in.
    - Darenna Rainsdon

    ReplyDelete
  2. Isn't it a little bit ridiculous how easy it is to rope us in sometimes? It's like that old saying goes, jump over a dollar to get to a dime...spend 100 dollars in groceries to save 10 cents a gallon which is really only 2 dollars...

    ReplyDelete
  3. this topic of network effects was very fascinating to me. I myself work in retail and we as employee's have incentives to remain loyal to the company just as our customers do as well. If it wasn't for the Network effects I don't think I would be able to keep my customers and keep them returning.

    ReplyDelete