Managing Value Networks And Channels

Successful value creation needs successful value delivery. Holistic marketers are increasingly taking a value network view of their businesses. Instead of limiting their focus to their immediate suppliers, distributors, and customers, they are examining the whole supply chain that links raw materi^ components, and manufactured goods and shows how they move toward the final consumers. Companies are looking at their suppliers' suppliers upstream and at their distributors' customers downstream. They are looking at customer segments and how company resources can best be organized to meet needs. Failure to coordinate the value network properly can have dire consequences.

rscount chain Km art's rise in the 1970s was charac terrzed by its blue fight speciafs and famous for infamous) in-store announce. ment, "Attention Km art Shoppers i" Bur suffering from poor locations, an unfavorable image, and deteriorating safes, Kmart decided to rry to match WaJ-Mart's everyday Jow prices. This move, however, forced the company to drop rhe wideJy distributed Sunday newspaper circulars thai promoted sales and drove store traffic. Even worse, a terrible replenishment system aJso resufted in numerous hot severs being out of Stock. Kmart fried for Chapter 11 bankruptcy on January 22, 2002, the biggest retailer to have done so up to that time.1

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