This week’s blog focusses on ‘the paradox of embeddedness’. To explain this in an easy way I interviewed someone in order to link the theory to practice. But first let me quickly explain what this ‘paradox of embeddedness’ is. Being embedded in too many close relationships will lead to less new ties, it will result in solely redundant information streams. This week I interviewed the Turkish bakery around the corner of my home in Amsterdam. It seemed interesting because in this neighborhood there are so many bakery’s like these, how can you be successful with that amount of competition.
The most important component of embeddedness that played a major role in the success of this entrepreneurs’ business was trust. Having seen the amount of Turkish (and Dutch) bakery’s around having regular customers is a must in order to run a successful business. And getting new customers to keep coming back to your store requires trust. They have to trust that your bakery is clean, delivers good products and is open at times you want them to be open. This entrepreneur is running his bakery for over 15 years and during these years has build up a stock of regular customers. Which made him able to keep doing what he loves, baking bread.
The paradox of embeddedness, or overembeddedness is in this case not applicable. The customers he gets in his shop are no strong ties. The only strong ties he has are with suppliers. But since he buys his products at the food market, where every morning products are auctioned, this is not a problem for him. The only thing I could imagine that could be a problem due to overembeddedness is the change of products. Customers buy their bread at his shop because they know what they can expect, and on the other hand, he knows what his customers want and that is what he delivers. But trying new things, new types of bread is not the case, this might, and I say might, lead to customers leaving to other bakery’s that do innovate and try out new types of bread. But he didn’t recognize this problem, and he thinks customers will keep coming back to his store.
I hope you all enjoyed this blog on overembeddedness and learned a bit more.
See you next week!