Dancing on the value chain

Author: Chen Xi
Publisher:
Publish Date: 2004-03-01
Features: Business leaders, managers, or those aspiring to become managers must learn to utilize the value chain concept to navigate the business world. Only by mastering this powerful tool can they dance with confidence on the value chain and achieve victory with ease. Who wouldn’t want to carve out a piece of this market’s big cheese? Only by grasping the secrets hidden within the value chain can one strategize and win battles from afar. Look, who is gracefully dancing on the value chain?
The competition in the value chain has long replaced the competition between individual companies and their respective value chains. The model where a single enterprise vertically covers the entire industry, occupying all or most of the value-added segments, has fallen behind the times. Competition has evolved from individual company rivalry to competition between value chains. The intertwined relationship of survival and coexistence has led countless enterprises to realize that only by ensuring the overall value chain succeeds in competition can individual members of that chain achieve value and rewards.
When striking gold, people’s excitement is beyond words. Perhaps they take a break, thinking they can sustain themselves with this newfound wealth, or they become obsessed with counting the gold. But what we want to say is: stand up, brother, and dig for your second barrel of gold—this is what value chain extension brings—maximizing corporate capabilities with existing core competencies, expanding the value chain, and digging for more barrels of gold!
A company is like a string of pearls, with each link representing our business. The pearls are strung together like all our businesses are closely interconnected. The thread used to string the pearls is the company’s organizational structure and management system, while the process of turning the pearls into a necklace is the company’s business processes and information flow.
Those companies that excel at managing their brands have reaped substantial rewards on the brand value chain. Some traditional product giants, like Procter & Gamble, have already joined the ranks of new successful "branders." Today, more and more companies recognize the significant importance of appropriately allocating resources to their brands for long-term development. This value chain, like an oil well, holds infinite energy. How to develop it is up to you.