Building a Value Network

Peter Drucker, the late management guru, stated that every company has two basic functions: marketing and innovation. To be an effective company, Drucker argued that a company must innovate. If it did not, it couldn't be successful over time. Yet most executives are only marginally satisfied with their current levels of innovation, and many are disappointed with the level of improvements that resulted from their efforts.¹

In many instances it is the value network— which is usually taken for granted (at best) or flat-out neglected—that executives should turn to as an important tool for innovating solutions. A company's value network is the collection of business functions, systems, and processes that are designed to deliver value to the customer. The value network, as a critical mechanism for innovation, also becomes a key part of the business strategy because it creates systems that will:

Create a natural barrier to entry for competitors.
Make the business more competitive in the marketplace.
Ensure profits in good economies.
Insulate the company from losses in a bad economy.

A close approximation of a value network is marketing's traditional 4 Ps (price, product, placement, and promotion). This is a useful tool, but frequently does not go far enough. Creating a value network will serve much the same basic function as the 4 Ps, but takes it several steps further. The 4 Ps can be fairly easy to replicate, however replicating systems and processes are much more complex. As such, the value network becomes intertwined with the overall corporate strategy.

Strategy is a combination of all the things that you do. For example, for Wal-Mart or Southwest Airlines to compete on price, all of their processes need to work together. All the little details must exist to support their driving goal, which is to provide the lowest prices for their customers.

The features of these companies, part of their 4 Ps—the warehouses, the airplanes, etc.—are fairly easy to replicate. Yet, the way their processes, capabilities, and personnel are integrated and executed is what makes each of these companies unique and successful, even in the worst of economic environments.

How we can help

We solve problems by looking at the problem, understanding the constraints, and then creating innovative solutions. For us, sliced bread is a great example of innovation: two existing resources (bread and slicing) combined to create new value. This is exactly what we mean when we say resourceful innovation.

As an objective third-party, we will evaluate your existing systems and processes for what they are. Our experience allows us to provide pragmatic solutions suitable for any sized company and are designed to help you achieve your business goals. In building a value network, we can help with:

Enhancing existing capabilities.
Brand management.
Channel distribution.
Alliances/partnerships.
And more.

Benefits of good process

A good value network is based on establishing solid internal systems and processes. Process is a result of good planning and even in small companies can yield results such as:

Better forecasting and budgeting.
Encouraging employees to be creative problem solvers.
Higher productivity.
Higher employee morale.
Quicker training times for new and existing employees.
Reduce operating costs.
Higher profits.

To learn more about how Aperio Marketing can help you build a value network, please contact us.

If you would like to learn more about the importance of process and integrated systems, please complete the form below to download a free sample of one of our Marketing Tools & Diagnostics, "How to Increase Sales through Teamwork."

1. Bernhardt, Ken. "Marketing Innovation: Creating Competitive Advantage" Atlanta Business Chronicle - January 27, 2006. <http://robinson.gsu.edu/news/bernhardt/2006/1_27_06.html>