Chapter 10
                             Value Chain
                                   Strategy
         McGraw-Hill/Irwin                                         Copyright © 2009 by The McGraw-Hill Companies, 
                                           Inc. All rights reserved.
                Value Chain Strategy
                Value Chain Strategy
     * Strategic role of value chain
       Strategic role of value chain
     * Channel strategy
       Channel strategy
     * Managing the channel
       Managing the channel
     * International channels
       International channels
                                                          10-3
                       Dell’s dilemma
                       Dell’s dilemma
     * Business built around powerful direct 
        Business built around powerful direct 
        business model
        business model
     * Direct model poor fit with customer 
        Direct model poor fit with customer 
        preferences in new target markets and weak 
        preferences in new target markets and weak 
        on service
        on service
     * Dell is braodening business model
        Dell is braodening business model
        * Targeting computer re-sellers
           Targeting computer re-sellers
        * Global retail strategy (including Wal-Mart, Dell-
           Global retail strategy (including Wal-Mart, Dell-
           branded stores, kiosks in malls)
           branded stores, kiosks in malls)
     * Redesigning value chain is critical strategic 
        Redesigning value chain is critical strategic 
        move
        move
                                                                 10-4
           Strategic role of value chain (1)
           Strategic role of value chain (1)
      Distribution functions
      Distribution functions
         * Buying and selling
           Buying and selling
         * Assembly
           Assembly
         * Transportation
           Transportation
         * Financing
           Financing
         * Processing and storage
           Processing and storage
         * Advertising and sales promotion
           Advertising and sales promotion
         * Pricing
           Pricing
         * Reduction of risk
           Reduction of risk
         * Personal selling
           Personal selling
         * Communications
           Communications
         * Servicing and repairs
           Servicing and repairs
                                                                          10-5
               Value chain structures - consumer products
                Value chain structures - consumer products
                                                           Consumer Products
                                                                 Producers
                                                             Supply Chains
                                                                                                 Sales
                                                                                                Agents
                                          Direct                       Wholesalers         Wholesalers
                                         Channel
                                                     Retailers           Retailers           Retailers
                                                                Consumers
                                                                                                                                           10-6