What is network analysis?
Network analysis is a method for studying the relationships and connections between a set of entities — which might be people, organisations, processes, or any other nodes in a system. By mapping these connections, network analysis reveals how information, influence, resources, or value flow through the system.
In a business context, network analysis might be used to understand informal communication patterns within an organisation, map the relationships between suppliers and customers, analyse partnerships and alliances, or identify key influencers in a market.
Key concepts in network analysis
Network analysis uses several key concepts: nodes (the entities being studied), edges or links (the connections between them), centrality (how connected or influential a particular node is), clustering (the degree to which nodes form tight groups), and path length (how many steps it takes to get from one node to another).
In an organisational network, a highly central person might be an informal information hub or a bottleneck — someone through whom most communication flows. Understanding this can help leaders make decisions about structure, delegation, and communication.
Applications in business strategy
Businesses use network analysis in a variety of strategic contexts: identifying key customers or partners whose relationships have outsized influence on the business, mapping supply chain dependencies and vulnerabilities, understanding competitor ecosystems, and analysing social network dynamics for marketing purposes.
For professional services firms, understanding the structure of their professional networks — who knows whom, where the most valuable referral relationships are — can directly inform business development strategy.
Limitations of network analysis
Network analysis is a powerful lens, but it has limitations. It captures the structure of relationships but not the quality or content of those relationships. Two organisations may have many formal connections but little actual value exchange, or a single strong relationship may deliver more value than many weaker ones.
Network maps also change over time. A static analysis represents a snapshot; businesses need to update their network maps regularly to reflect how relationships evolve.
How Empiraa relates to network thinking
Empiraa Signal helps businesses manage and understand their relationship networks through the CRM and pipeline management tools. By tracking interactions, connections, and outcomes across a customer and partner network, teams gain the visibility needed to invest in the most valuable relationships.
For strategy advisors, network thinking is a valuable lens for helping clients understand which relationships are most important to their competitive position and growth.