Introduction to Value Chain Networking
This article is an excerpt from the Total Financial Network (TFN) white paper by Christopher Vincent titled Value Chain Networking. Download the entire white paper in pdf format HERE. The ever changing pace of today’s consumer market coupled with the transparency of technology and media, present a variety of challenges for all businesses. Start-up and existing small businesses may lack the structure and resources available to enact change whereas mid-sized and larger organizations may lack the flexibility to implement change within their culture. What becomes evident is that an ever evolving methodology of conducting business both internal to the company and external is required for success. As the saying goes, much like a tomato, a company is either ripening or rotting. For many businesses, an emphasis on more loosely collected / pooled resources or an emphasis on partnerships / alliances tends to be the trend as opposed to traditional vertical aligned, ridged and hierarchical designed organizations. This “networked business” or affiliate approach allows smaller organizations to utilize the assets of the collective whole while still maintaining the agility of a niche company. This can be seen most predominately in, subcontracted and resold products / services as well as the outsourcing of business commodities. Within this new, emerging and loosely defined approach, how do businesses formalize and intentionally pursue putting this framework together? How can owners and managers measure their success and their utilization of the tangible and intangible resources that are the most valuable to their business? The activity of Value Chain Networking (VCN) aims to answer these questions among others and offer a business strategy for implementation. Continue to Part 1: Value Chain Networking...
Read MoreBipolar View of Business Development
Business Development Defined: Business development is the process of incorporating a number of techniques and responsibilities, which aim to attract new customers and penetrate existing markets. This includes everything from incorporation, business strategy, planning, projections, marketing, advertising, lead generation and fulfillment. Business development is for companies just starting as well as seasoned organizations. Although at times, the business development process will address every element of an organization, typically business development focuses on either a company’s “Value Stream” or “Commodities.” Value Stream Definition: Often referred to as the “Supply Chain,” the value steam for a business is the end-to-end milestones that drive to deliver a product or service to the customer. The process steps throughout the value stream may include, purchasing, planning, production, manufacturing, quality control and logistics. Throughout the value stream there are key points of product, service and information flow that can be analyzed for improvement in the overall chain. Value stream mapping is a common lean manufacturing technique that aims to analyze the supply chain efficiency and eliminated non-value added steps or procedures. The idea is that by removing these elements from the value steam, it will help minimize costs, increase throughput, decrease turn times and improve time to market. Supply Chain Consulting: Specialists in the world of supply chain consulting utilize “Six Sigma” and “Lean Principles” to diagnose symptoms of a poor performing supply chain and make suggestions for improvement that will allow the business to run more efficiently. Often, a more efficient supply chain will result in reduced costs that improve bottom line profits. Utilizing a supply chain professional allows the business to focus on their core competency and will also help identify what the core competency truly is. The benefit to the business is that they can focus on performing that company’s chief revenue earning practice, rather than spend time trying to improve the underlying processes. Business Commodities: Business commodities for this discussion, are all aspects of the business outside of the value stream and/or core competency of the business. For many businesses, the commodities are as follows… Human Resources / Payroll Marketing / Advertising Implementation Legal & Administrative Finance / Accounting Information Technology These business elements fall outside of the primary revenue source for most businesses and a majority of small to mid-sized business outsource all of these elements completely. For many small businesses, sales and marketing is an afterthought, yet thousands of ad agencies are consistently attempting to sell spots to them. How does the business know what type of ad campaign to run without a proper upfront strategy? Legal is another area that is commonly skimmed over because of the tremendous cost of 3rd party attorneys. For many small businesses, Finance / Accounting is another lightly visited area, and many small business owners are oblivious to their cost structure including basic concepts such as the business “break even” point. Information Technology tends to be either highly under or over utilized for small to midsized businesses. What good is a high priced E-Commerce web site without the proper marketing to let consumers know that it exists? Commodity Consulting: There are thousands of companies today that aim to sell various tertiary elements to the business owner but very few that truly align with the business in order to drive its overall success. Total Merchant Network is the first business development company that truly views the business as a client and not as the next sale. By aligning itself with the top providers for each commodity, Total Merchant Network gives the small business owner access to strategy development and...
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