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What Is an Extended Enterprise?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 07 December 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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An extended enterprise is a concept that has to do with defining the wider scope of components that have an impact on the ongoing operation of a company. This approach to understanding company identity holds that along with understanding the business as being composed of the owners, executives and managers, and the employees, the overall structure of the company also includes suppliers and vendors, any business partners the firm may have, and even the consumers who ultimately purchase the goods and services offered by the company. This more encompassing approach to the business enterprise holds that if there is some sort of breakdown within any one of these components, the company will not function at full efficiency.

The very nature of an extended enterprise requires forging closer relationships with each of this self-organizing network of firms. This means that the business proper understand the delivery capabilities of suppliers and vendors at any given point in time. Doing so helps to increase the efficiency of any supply chain policies and procedures that are in place, effectively matching the needs of the company with the capabilities of its suppliers.

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At the same time, this sort of strategic alliance also extends to understanding the mindset and capabilities of all business partners, making it easier to develop an operational structure that helps to draw on the strengths of those partners while minimizing any weaknesses that may be present. For example, if the business partner happens to be a public relations firm, understanding the type of connections the firm has and how those connections can aid in securing the best pricing for advertising in different media will greatly enhance the marketing effort. In like manner, the concept of an extended enterprise involves understanding what outsourcing partners can and cannot accomplish within certain time limits makes it easier to project completion dates for projects assigned to those partners and maximize the efficient use of company resources.

One benefit to an extended enterprise mindset is that it calls attention to a support network that could be overlooked to some degree. The approach can help cultivate closer relationships with each component of the operation, both within the company proper and the extended enterprise that encompasses partners and customers alike. With the right balance, this approach can help improve vendor relations, enhance the returns generated with business partners, and even deepen customer loyalty in ways that would be difficult to accomplish otherwise.

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