Your Value Chain

The Value Chain is the process that a product goes through until it gets to the end consumer. Having a strong value chain leads to a sustained competitive advantage.

Here’s an example of PepsiCo’s Value Chain: 

• Step 1: Raw Materials

  • PepsiCo buys raw materials from agricultural suppliers: grain, sugar, dairy, etc. 

    • Value comes from how cheaply PepsiCo can buy quality commodities while balancing green farming practices.

• Step 2: Operations 

  • PepsiCo’s facilities transform the raw materials into the drinks and snacks we eat, as well as distributing those finished goods to stores where we can buy them.

    • Value first comes from how efficiently the factory can process the grain into little corn puffs and the dairy into delicious cheese powder to create Cheetos.

    • Value then comes from how consistently PepsiCo is able to deliver those items to grocery and convenience stores, balancing demand and freshness. 

• Step 3: Marketing, Sales, and Service 

  • PepsiCo’s corporate Marketing and Sales teams develop broad and targeted communications to ensure that: A) people demand PepsiCo’s products and B) those products are available and approachable in stores.

  • The firm’s Service teams exist to work through any issues with its grocery or convenience customers as well as individual consumers wishing to give feedback.

    • Value comes from building the PepsiCo brand. Without the desirability, availability, and consistency these teams bring to PepsiCo, few consumers would think about or want to try Diet Pepsi or Doritos.

All stages of a company’s value chain work together to create a competitive advantage. The stronger the chain, the greater the advantage.

You too have a value chain:

• Your raw materials are: Sleep, Diet, and Exercise

  • Value is created when you’re sleeping well, eating right, and exercising your mind and body. These raw materials lead to a healthy individual. 

• Your operations are: Relationships, Career, and Volunteerism 

  • In relationships, going from single to a couple brings happiness and affirmation.

  • At work, taking raw data and turning it into a story that persuades people brings wealth and performance accolades.

  • While volunteering, you’re using your time and ability to improve the lives of others.

    • Value is created when you’re taking something less refined and turning it into something that makes you happy, wealthier, and fulfilled.

• Your Marketing/Sales is: How You Show Up

  • Value is created when your vision for yourself matches all the previous stages of the value chain.

  • If your raw materials are of high quality, and you use those inputs to create strong relationships and performance at work, your brand improves and you’ll be in a better position than before. 

Having a strong personal value chain will lead to a strong personal brand. 

The “space in between” is a combination of your raw materials and operations.

Add value at every stage, and you strengthen the whole chain.

PK