Red and Yellow Strategies
Value Network and Value Exchange
It’s Tuesday, and it’s time for the ‘Strategy in one minute’ column.
Everyone is familiar with Michael Porter’s Value Chain concept.
Porter stated that any company is a chain of activities delivering customer value.
But any company is also a part of what Porter called a ‘Value Network.’
A value network consists of businesses that help you create value for your customers.
They are your suppliers, subcontractors, distributors, retailers, IT service providers, etc.
Oftentimes, we look at them only as suppliers or subcontractors.
But if you involve them in the value creation process, both you and they will benefit.
A few companies I’ve worked with took the task of building the value network seriously. But those who did flourish.
Do you take this task seriously?
Contemplation questions:
[1] What businesses does your Value Network include?
[2] What contribution do they make to the value you offer to your customers? How does their work affect the value you provide for your customers?
[3] How could you persuade your Value Network members to cooperate in creating value for your customers?
[4] What exactly could you do together to generate more value for your customers?
[5] Who in your company could be responsible for the task?
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Read also: A $3 Billion Strategic Mistake. The True Story of a Notorious Failure
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