BAM 306 - Princibles of Marketing-unit 1 question # 2 - Essay Example

Question #2: "What does the term value delivery network mean? Explain. A firm’s valued network is comprised of all the participants in its supply chain network that add value to the final offering. It incorporates the strategic alliances and partnerships in its channel design, which may relate to all the stages of distribution. Hence, a value delivery network is made up of the suppliers, suppliers’ suppliers, the immediate customers, and the final customers. Therefore, a value chain network provides two-dimensional view of the supply chain consisting of an upstream and a downstream view, which enables it to plan and design its channel network that would maximize its supply chain surplus and facilitate strategies that can result in a sustainable competitive advantage for the firm.

A valued network enables a firm to identify its key micro environmental participants; suppliers or customers and design the marketing as well as distribution techniques based on that insight. To illustrate a value offering it is important to identify the meaning of value in the first place. Value can be referred to as the benefits that the end customer obtains from using the product or service. Thus, for an offering to be “valued” it must have a core product as well as the perceived and actual value for the end customer.

The value chain network also sets a framework for a demand chain planning whereby the firm should design the supply chain of its operations based on the demand from its target market. It is one of the most important tools used for effective strategic management whereby the firm can decide whether it needs to integrate vertically or horizontally. Errors in the supply chain or potential causes for inefficiency can be highlighted through a strategically developed value chain network (Kotler & Armstrong, 2010).

The most fundamental premise to achieve a successful value delivery network is with a adequate implementation of management information systems to facilitate a flow of information across the supply chain. Supply chain management software incorporating SAP and Oracle are amongst the most famous to develop a system of achieving operational excellence through greater accuracy and reliability of data. There are specialized software to assist in the manufacturing, human resource management, distribution, general-ledger and almost all aspects of the supply chain.

It is important for companies to arrange partnerships with all participants of the supply chain in order to derive highest value for their businesses. This can be achieved through electronic integration of channels between different parties involved in bringing products and services to the final customers (Kotler & Armstrong, 2010). Therefore, it can be rightly said that a value delivery network is a collaborative value network that is created with a view to gain a “win-win” position for all the partners in order to maximize profits.

It is a direct outcome of globalization that has posed firms with greater pressure to innovate. Value delivery chain is the basis of relationship marketing whereby the created value in the form of a final offering through supply chain processes is delivered through a supplier-managed relationship. References Kotler, P., & Armstrong, G. (2010). Principles of Marketing. New York: Pearson Prentice Hall.