Porter's nine value-creating activities

Five Primary Activities:

? Inbound Logistics: how the firm goes about sourcing raw materials for production.
? Operations: how the firm converts the raw materials into final products.
? Outbound Logistics: how the firm transports and distributes the final products to the marketplace.
? Marketing and Sales: how the firm communicates the value proposition to the marketplace.
? Service: how the firm supports customers during and after the sale.

Four Support Activities:

? Firm Infrastructure: how the firm is setup for doing business; are the internal processes aligned and efficient.
? Human Resource Management: how the firm ensures it has the right people in place, trains them, and keeps them.
? Technology Development: how the firm embraces technology usage for the benefit of customers.
? Procurement: how the firm deals with vendors and quality issues.

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Q&A Response One by L. S.

Question:

Briefly describe the marketing strategy (Value chain) that the company you work for, or a company you used to work for, uses. Has that strategy changed? Why or Why not?

Answer:

Each of the five primary activities described by Marshall and Johnston (31-32) are present in my present company. Each of these is described below.

Inbound logistics: in a hospital setting this includes supplies and materials, equipment, chemicals, and human resources - everything needed to provide the product/service to our patients. In this case, the product is a service - healthcare. The strategies utilized to obtain the materials are always changing. For example, as supplies of medical supplies and equipment change or as new technology presents it self or pricing of the same supply is better from one vendor over another, the source of needed materials changes. Another example of the need to change relates to human resources. As market availability and value of a specific specialty, for example, pharmacists, and changes in the external environment overall or locally, the marketing strategies to obtain these human resources have to be adjusted. This may present as a higher wage, sign on bonuses, tuition assistance, and moving cost coverage to name a few.

Operations: this includes all of the trained staff following identified processes and performance expectations in order to reach the organizational goal of providing quality care to the patients. Work flow, hand off communications, technical skills and knowledge are included. All of the 'materials' obtained via inbound logistics are used to provide healthcare to patients. This activity is also very fluid. A new piece of equipment with new technology requires staff training and assessment of staff competence. This may result in the need for a different work flow process that may impact the patient. Work flow and patient through put processes are assessed and changed accordingly, always keeping the patient as the priority in the process.
Outbound logistics: the healthcare services are generally provided on the hospital site. In some cases, services have been expanded to provide healthcare services at a particular business. For example, influenza vaccinations are provided to local business organizations at an agreed upon cost.

Marketing and sales: The company utilizes multiple communication methods to promote the service - healthcare delivery - including local newspapers advertisements and stories, facebook, company web site, billboards, newsletters, mass mailings, word of mouth to name a few. This changes over time and dependent on what audience/market is the focus of the particular market campaign. If a new service, such as sports medicine, is being marketed, the strategy is much different than that of a women's health initiative. Facebook marketing is targeted to the younger population.

Service: The organization includes customer service as a part of the business strategic plan and the marketing strategic plan. Excellent customer service is expected from all employees starting with the CEO who cites customer service excellence as an 'absolute' requirement. Individual departments and services have developed customer service plans specific to their departments. Input and feedback from customers is continuously being obtained via surveys, questionnaires, and through the patient advocate. This activity is continually evaluated based on the feedback from customers and changes are implemented in cases where the decision is made that the change is of value for the customer and is financially and operationally feasible.

This entire process is evaluated on an ongoing basis. There is a need to be flexible and adjust plans based on internal and external factors and forces. It is like an intricate dance - adjustments are constantly being made to assure that the end product is beautiful dance pleasing to all who watch. In my company the end result is the provision of quality, customer driven health care.

Please provide a response with your thoughts and comments to the feedback provided above.
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Q&A Response Two by C.U.

Question:

Briefly describe the marketing strategy (Value chain) that the company you work for, or a company you used to work for, uses. Has that strategy changed? Why or Why not?

Answer:

The company I work for uses Porter's nine value creating activities as described in the book. As an agriculture, construction and forestry machine manufacturer we get our raw materials (steel) as well as some components (such as fuel pump, oil cooler, hydraulics, frames, cab,..) for the machine from our supplier base. These suppliers base are identified through quality & financial system assessments that verify if any given supplier (company) will be aligned with our marketing strategy that is customer driven. Since we provide service parts to our customers up to 25 years after the product has been out the production, our suppliers have to be willing to provide those components to us for that period of the time even though the demand will decline over time. Our operations are based on high quality and value added customer processes. We pride ourselves in manufacturing the best quality tractors and we can only produce the tractors if we have orders. We can customize any tractor to fit our customer needs/ requirements. The final products are transported to our dealership which are our partners in selling/servicing our customers. We have our worldwide logistics department that is in charge of making sure that each customer receives their products in time and good condition. As we buy our components and sell final products around the world, this worldwide logistic department plays a key role in transporting these components and products to and from our manufacturing plant. We market our value proposition to our customers through web page, facebook, conferences, and dealership network. We train our dealers on all key features of the tractors so that they can be able to fully explain and demonstrate the best functions of our tractors.

We also held marketing conference where our customers can tell us what features/functionality that works best and they would like to see in our tractors. Then this information is feedback to our R&D department for future improvements. This value chain has been going on for a long time and the only thing we are changing today is to get a better understanding of our customers' demands as we are growing overseas in china, Russia and India. For that we are developing new technologies that can best fit this market and still provide the best high quality and value added tractors.

Please provide a response with your thoughts and comments to the feedback provided above.