The Value Chain

A Back Seat

I recently took up bicycling as a hobby. Like most hobbies, along with the excitement of the actual activity itself, comes the specialized gear and equipment that accompanies it. I was lucky to start off without the largest expense of an actual bike having restored my dad’s 1975 Peugeot PX 60 road bike (with some help from Trek Tech Team on Route 41). She turned out to be a real beaut’; born in France (home of the “tour de__”), 100% steel original, and made popular in that era by biking champion Bernard Thevenet (yes, I’m now a bike-nerd). This bike has real sentimental value too as I can vividly remember my father receiving it as a gift upon a vacation to Italy we took when I was just five years old.

Long story short, the bike needed a little work including a new seat, or saddle, as other enthusiasts like to refer to it. You see the ‘75 French Ideale 2001 saddle that came on the bike, is little more than a piece of pleather on a stiff rounded structure/board. I started my research and identified a worthy contender for purchase—a Brooks B 17 Imperial Black leather saddle. All the social media comments, retail comparisons and forum reviews were glowing. The seat was often described as comfortable, stylish and retro. I was also impressed with the comments about the experience of purchasing a Brooks saddle and how customers “oooh-ed” at the packaging and sheer quality of the product. Brooks is an English company that dates back to 1866 when they made real saddles for horses. That qualify and brand name has been extended through the years. The bike saddles they now manufacture come in a unique box and are packaged neatly along with Brooks’ saddle wrench, colored laces, the seat (of course) and a booklet on the history of Brooks. Needless to say, I was looking forward to the packaging almost as much as the actual product.

I decided to purchase my saddle from online retail sports outfitter, REI (, who’s well known for their support of outdoor sports’ enthusiasts with comprehensive product brand offerings and services. Their pricing was not the least expensive but I was drawn to them primarily because of their 365-day return policy if for whatever reason the customer is not 100% satisfied. Pretty cool! And, worth an additional $20/$25 in my opinion especially for something as intimidate as a bicycle saddle.

The saddle arrived on time yet the packaging experience was not what I was expecting. The seat was loose (not secured) in the box. The polish, cloth and rain cover were missing and the history booklet was torn. This product’s packaging had been clearly tampered with prior to my receipt and I was not happy. I contacted REI and they were very apologetic and accommodating. They agreed to send me a new saddle within three days and offer a return receipt for the existing saddle. This experience got me thinking:

  • The entire value chain is so important and only as good as its weakest link no matter how great the final product/service offering really is.
  • How many brands tie themselves to the value of other as part of a value chain. (i.e. in this case retailer, manufacturer, shipping company, etc.)
  • Who is ultimately accountable for value added or subtracted from product manufacturing to customer receipt and/or ingestion?

The Value Chain, Defined

The Value Chain is an important concept that’s part of every product or service cycle. It can be defined a few different ways as follows:

  • (Macmillan Dictionary) The series of activities that a company carries out as it designs, makes, sells and delivers a product or service, with each activity adding value
  • (From SearchCIO’s Margaret Rouse) According to John Del Vecchio writing for, a value chain is “a string of companies working together to satisfy market demands.” The value chain typically consists of one or a few primary value (product or service) suppliers and many other suppliers that add on to the value that is ultimately presented to the buying public.
  • (Investopedia) A high-level model of how businesses receive raw materials as input, add value to the raw materials through various processes, and sell finished products to customers. Value-chain looks at every step a business goes through, from raw materials to the eventual end-user. The goal is to deliver maximum value for the least possible total cost.

In looking at each of these definitions and the key words highlighted above, it’s clear that the value chain is a set of processes or activities carried out but different functions within a business and/or other companies or suppliers. Each process or activity adds value to the product or service prior to the final offering to the end-user. The goal is to maximize the value output for the least amount of cost. In analyzing this further, several questions come immediately to mind:

  • Who controls quality for each step of the value chain or is that left up to the individual function, supplier or company?
  • What if one process or activity performed does not add its fair share or expected value?
  • Does quality diminish the longer the value chain for a specific product or service?


At the end of the day, your value chain is only as good as your weakest link. I know, that sounds cliché but in most cases, the individual functions, processes and/or activities of the value chain are pretty transparent to the end-user. For example, I did not care how many people, companies, functions, processes or activities touched my Brooks saddle. I only knew that it arrived in poor condition and not to the spec of the manufacturer (the initiator of the value chain). This weak link (somewhere between creation and delivery) was unaccounted for yet set off a ripple of negative brand perception across all links (manufacturer, retailer, distributor, etc.).

It is encouraged that you sporadically spot-check your own value-chain for your business; albeit product or service. To do so is pretty easy. Simply act like a customer and place an order. Then follow the product or service from creation through to delivery and follow up. Does the final product or service meet or exceed yours and your customer’s expectations? What value optimized throughout each step of the process including taking the order, delivery and post-delivery follow up? Were costs minimized yet not at the expense of quality and/or value across each process and/or activity? Are all suppliers, other companies, vendors and/or employees aware of the standard of quality, their role in your value chain and your expectations? By analyzing your own value chain you will better understand your business; where improvements can be made and how to better satisfy your customers and reduce risk.

About the Author

Angelo Biasi is General Manager of SMART Marketing Solutions, LLC, a leading full-service integrated marketing company in Florida and New York since 2001. He has helped create and execute marketing plans and integrated marketing solutions for companies such as Playtex, Bic, Rogaine, Tauck, and over 35 colleges and universities, to name a few. Angelo has an MBA in Marketing from the University of Connecticut and teaches Marketing at New York University where he has for over six years. He has been quoted and/or featured in USA Today, Mobile Marketer magazine, Mobile Commerce Daily, Luxury Marketing magazine, BNET TV and Business Currents magazine, to name a few. For more information or to learn more, email him at abiasiatsmartmarketingllcdotcom  (abiasiatsmartmarketingllcdotcom)  , visit, call him at 239.963.9396 and follow him on Twitter @angbiasi.


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