• Home
  • News
  • Marketing Events
    • Marketing Events Calendar
    • Submit An Event
  • Business Directories
    • Marketing Agencies
    • Advertising Agencies
    • Market Research Agencies
    • Market Research Recruitment
    • Event Management Agencies
    • Public Relations Agencies
    • Marketing Industry Associations
    • Industry Recruitment Agencies
    • Promotional Merchandise Agencies
    • Social Media Marketing Agencies
    • SEO & SEM Agencies
  • Marketing Tools
    • Marketing Plans
    • Marketing Publications
    • Marketing Jobs
    • Calculators
    • Media Research
    • Advertising Facts
  • Advertise
  • Write For Us
  • Subscribe

Marketing.com.au

Marketing news, events and resources

  • General
  • Advertising
  • Content Marketing
  • Market Research
  • Public Relations
  • SEM
  • SEO
  • Social Media
Core Marketing Concepts Refresher: The Value Chain

Core Marketing Concepts Refresher: The Value Chain

June 7, 2013 By Sally Wood

Are you one of those people that have been lumped with marketing duties (even though you are a bona-fide IT nerd)? Or, perhaps you finished your marketing degree way back when Twitter was something only birds could do. Whatever the case may be, we all need to brush-up on our book learning from time-to-time. Believe it or not, some of this stuffy theoretical jargon can help guide day-to-day hands-on marketing tasks. So (for your reading pleasure), today we bring you the first instalment of a dummies guide to core marketing concepts: the Value Chain.

The Value Chain

Michael Porter (a leading professor at Harvard Business School, particularly in the area of company strategy) is the main proponent of Value Chain concept. The objective of the Value Chain concept is to find ways to create more value for your customer. According to Porter’s model, a company is simply a synthesis of activities performed to design, produce, market, deliver and support its product(s). I bet you’re thinking that sounds fairly obvious, aren’t you? Told you. But wait, there’s more.

The Value Chain identifies nine strategically relevant activities that create value or cost for a company. There are five primary activities and four support activities:

  • Primary activities: inbound logistics; operations or converting materials into final products, such as manufacturing; outbound logistics or shipping of final products; marketing and sales; and service.
  • Support activities: procurement, technology development, human resources and general infrastructure like management and finance and legal departments.

To create more value for customers (and thereby increase sales and profits) companies need to analyse its costs and performance in each of the value-creating activities (both primary and support) outlined above and find ways to improve each area.

There is a multitude of ways to do this. Unfortunately, we can’t give you a one-size-fits-all outline of ways to improve your value-creating actives. Improvements need to be tailor-made to suit your company, your industry of operation, your brand.

What we can do is provide some hints on where to start. First of all, you should be looking at ways to streamline process, improve efficiencies and reduce expenditure. So, start with some competitor analysis. Estimate what the costs of your competitors are and benchmark against them. Are you spending too much on manufacturing and not enough on R&D? If so, make a change. Otherwise, your competitors will be releasing brand new products and you’ll be left for dead.

Study the best-in-class practices of the world’ best companies. Often, there might be no need to reinvent the wheel. You might be able to use a pick-n-mix approach to your value-creating activity improvement; simply implement the best parts of other company’s programs (without completely ripping-off other people’s intellectual property – we don’t want any law suits on our hands here).

It is also important to keep in mind that a company’s success depends not only on how well each department performs, but also on how well the company coordinates departmental activities to conduct core business processes. Think about the following core processes. How many different departments are involved in each?

In the new-offering realisation process (which includes researching, developing and launching new products quickly within budget), the R&D department will be heavily involved, as will manufacturing, warehousing, logistics, marketing and finance and sales and human resources and legal and IT. In the customer acquisition process (defining new target markets and prospecting for companies), the marketing, finance and sales teams will need to work together. In the fulfilment management process (receiving and approving orders, shipping goods on time and collecting payment), the manufacturing, procurement, logistics and finance teams will be heavily involved.

A company needs to be a well-oiled machine, with all departments working together to create value for customers, thereby increasing sales and profit.

Marketing.com.au would like to thank Sally for sharing with us Part 1 of this great series of Core Marketing Concept Refreshers. Stay tuned for Part 2!

 

About Sally Wood

Having worked in marketing, communications and public relations roles for over ten years, Sally’s past life includes a plethora of activities, some of which even she can’t believe she was lucky enough to try her hand at. There was the development and implementation of internal communication programs for burly construction contractors; PR campaigns to launch The Simpson’s products (which just happened to involve carting life-sized Simpson figures around the country); people (and media) wrangling at Flemington’s birdcage for high-profile clients during the Melbourne Cup Carnival; CSR program design, implementation and GRI-accredited reporting; and, most recently, copywriting and internal stakeholder relations in a most serious corporate environment. Somehow, in the midst of all that, she also managed to get stuck into some study, undertaking a Bachelor of Arts / Law, completing a Postgraduate Bachelor of Letters in Public Relations and Journalism and recently starting an MBA.

 

  • About
  • Latest Posts

Sally Wood

Editor at Marketing.com.au
Sally has worked in marketing, communications, and PR for over 15 years. She is the Chief Wordsmith at Wordly: a copywriting and content marketing agency that works predominantly with WordPress powered websites.

Latest posts by Sally Wood (see all)

  • 6 Free Marketing Plan Templates - July 22, 2018
  • The Ultimate Guide to Instagram Advertising - June 23, 2018
  • Q&A with Amy Cockerell, Marketing Coordinator at the TAC - October 6, 2016

Other Related Marketing.com.au Articles:

  • Top 9 Effective Book Promotion Ideas for Authors
    Top 9 Effective Book Promotion Ideas For Authors
  • 2022 online marketing events
    Marketing Events – October 2022
  • How to Maximise Your Social Media Ads Budget
    How to Maximise Your Social Media Ads Budget
  • Popular SEO strategies being utilised in 2018
    What Is The "Helpful Content" Update According To Google?
  • 2022 online marketing events
    Marketing Events – December 2022
  • Top Seven Tips to Boost Your AdWords Campaign
    How To Run A Successful PPC Campaign On A Limited Budget
  • Utilising Customer Reviews to Enhance Your SEO
    How To Get More Google Business Reviews
  • 2022 online marketing events
    Marketing Events – September 2022

Filed Under: Latest News Tagged With: concept, core, customers, marketing, primary, profits, sales, support, value chain

Recent Posts

  • Marketing Events – August 2025
  • Top 9 Effective Book Promotion Ideas For Authors
  • Marketing Events – July 2025
  • Step By Step Process For Opening Your Own PR Agency
  • Hotels and Influencer Marketing

Join Our Newsletter

For free updates on upcoming Australian events, articles and resources.

CONNECT WITH US

  • Facebook
  • Twitter

MAIN MENU

  • Advertise with Us
  • Write For Us
  • Submit An Event
  • List Your Business
  • Marketing Events
  • Business Directories
  • About Us
  • Contact Us

SEARCH BY CATEGORY

  • Advertising
  • Content Marketing
  • General
  • Market Research
  • Public Relations
  • Search Engine Marketing (SEM)
  • Search Engine Optimisation (SEO)
  • Social Media

Join Our Newsletter

For free updates on upcoming Australian events, articles and resources.

Copyright © 2025 Marketing.com.au · Terms & Conditions · Privacy Policy

  • Home
  • News
  • Marketing Events
    ▼
    • Marketing Events Calendar
    • Submit An Event
  • Business Directories
    ▼
    • Marketing Agencies
    • Advertising Agencies
    • Market Research Agencies
    • Market Research Recruitment
    • Event Management Agencies
    • Public Relations Agencies
    • Marketing Industry Associations
    • Industry Recruitment Agencies
    • Promotional Merchandise Agencies
    • Social Media Marketing Agencies
    • SEO & SEM Agencies
  • Marketing Tools
    ▼
    • Marketing Plans
    • Marketing Publications
    • Marketing Jobs
    • Calculators
    • Media Research
    • Advertising Facts
  • Advertise
  • Write For Us
  • Subscribe