Consulting Frameworks 4

Casing Boot Camp 2006
Casing
The Frameworks
MCA 2006
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Other keys to case interviews

• Be structured
– Break the problem down into a logical structure. Organize your thoughts by putting the
key issues into categories or “buckets” – in other words a framework
– Stay organized throughout
• Use a top-down approach
– Start with the big picture, then drill down into specific areas for exploration and
discussion
– Step back periodically to the big picture
• Work out loud
– Share your thought process with your interviewer
• Be data-driven
– Collect data within your buckets by asking the interviewer relevant questions
– Be comfortable with numbers
• Be confident, but responsive
– Drive toward the solution by taking initiative, but follow the interviewer’s cues
• Conclude strongly
– End your case with a firm and clearly stated data-driven recommendation
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Common mistakes
• Failing to stay structured

– Asking a barrage of questions
– Taking a haphazard approach
• Not reading clues from the interviewer
– Often their body language or tone of voice will let you know if you are going down the
right or wrong path. Pay attention!
• Making errors in your math
– Write the numbers out on paper and keep talking, so they can see your calculations
• Getting stuck on one area of exploration
– If you find you are hitting a brick wall, stop hitting it! Move on to other areas or buckets
– there are probably other topics that you could explore further
• Force-fitting common frameworks
– We will teach you the common frameworks. While these will be helpful in
understanding business problems, don’t rely solely on them. Use combinations, be
creative, develop your own framework that is relevant to that particular case
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Market Sizing Cases
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What is market sizing?
• A problem or question that asks you to estimate the size of a

market quantitatively
– Often, you are provided with limited information.
– You must make assumptions based on common knowledge or industry
insight, and must state those assumptions
• Market sizing tests:
– Your ability to do quick quantitative calculations
– Your ability to make logical conclusions and reasonable assumptions
– Your ability to think creatively
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A market sizing example
How big is the US Disposable Diaper Market

in annual revenue dollars?
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Two Methods for solving Market Sizing Cases….
• Top Down Approach

– Develop and state assumptions starting at a high level and working your way down
– Talk the interviewer through your assumptions as you make them and let them know why you are using the numbers you
pick.
– Follow cues from the interviewer!
– Do gut check with final number before committing to it
Total US # of Kids Assume 10% Assume 5 Assume 360 Assume $0.60

Population (under the age wear diapers diapers / day days per year per diaper
of 18) (<3 yrs old)
300 MM 100 MM 100M x 5% 5M x 5 =25M 25M x 360 = 9B x $0.60 =
=5M diapers / day 9B dprs/ yr $5.4 B
Note:
To estimate $ / diaper I assumed that diapers are sold in packs of 24 for ~ $14 = 14/24 ~$0.60
each rounding up
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• Bottoms Up Approach
– Develop and state assumptions starting at a lower level of detail
– Talk the interviewer through your assumptions as you make them and let them know why you are using the numbers you
pick.
– Follow cues from the interviewer!
– Do gut check with final number before committing to it
Baby G uses 6 I live in SF – Assume 360 Approx 10,000 Assume each

diapers / day 10% of pop are days per year towns / cities in diaper costs
babies in dprs the US $0.60
6 diapers per (2.0m x 10%) x 1.2M x 360 = 432M x 10,000 4.3B x $0.60 =
day 6 = 1.2M 432 M diapers = 4.3 B diapers $2.6 B
diapers in SF per year in SF per year
Note:
To estimate $ / diaper I assumed that diapers are sold in packs of 24 for ~ $14 = 14/24 ~$0.60
each rounding up
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How big is the US Television Market in

annual revenue dollars?
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Possible Solution:
Talk the interviewer through your assumptions step by step as you go. Follow
their cues and clue them in as to why you are using the numbers you are using!
# of US HH’s Average # of Assume TV Assume
Other potential TV’s per HH replaced once Average TV
users of TV’s every 10 years costs $500
Households 100 MM 2 TV’s; 200M x (1/10) 20M x $500
=100MM x 2 = =20 M TV’s =$10B
200 MM TV’s annually
Rank these based
Hotels
on assumed
contribution (i.e.
Hotels would Businesses
have a large
number of TV’s Hospitals
replace them
more often than
the other Schools
institutions
MCA 2006
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Estimate how much revenue a gas station

makes annually.
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Another market sizing example
– First, develop and state assumptions:

 Assume a suburban gas station, with 4 pumps
 Let’s assume it’s open for 24 hours, and has both peak and non-
peak hours. Assume 4 peak (7-9 am and 4-6 pm), and 20 non-
peak
 Assume it takes 6 minutes to complete transaction
 Assume during peak hours all 4 stands are fully utilized
 Assume during non-peak hours, each stand is used 3 times per
hour
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Market sizing example
• Start calculations. Organize and write clearly.
Peak Off Peak
10 transactions / hr (stands are fully utilized during

3 transactions / hour / stand
peak, at 6 minutes / transaction)
10 * 4 peak hrs = 40 transactions / stand / day 3 * 20 off peak hrs = 60 transactions / stand / day
40 * 4 stands = 160 transactions / day 60 * 4 stands = 240 transactions / day
Total = 400 transactions / day
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Market sizing example
• Continue assumptions. Use easy numbers!

– Assume 5 days / wk (50 wks / yr).
– 400 * 5 * 50 = 100,000 transactions / yr.
– Now, normalizing for high quality and standard gas, and for small and large
vehicles, assume that the average transaction fill up is $20 per transaction.
– Therefore, revenue / yr = 100,000 * $20 = $2.0M / yr
• And remember, there is more than one way to solve a market

sizing case
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Helpful Facts to Remember…

– 6.6 B people in the World
– 300 M people in the US
• Adults: 200 M
• Children: 100 M
• 100 M Households
• 50% of total population have access to internet (150 M)
– 50% of world web users speak English
• 10,000 Cities / Towns in US
• 140,000 ATMS in the US
– 8 M People in New York
• 1.5 M live in Manhattan
• 45 M visitors to NYC each year
– 3.5 M in LA
– 7 M in London
– 1.2 B people in China
• 13 M in Shanghai
– 1 B in India
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Porter’s Five Forces
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Porter’s Five Forces
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Applying Porter’s Five Forces
• Porter’s Five Forces is useful for starting to analyze the

landscape and determine the competitiveness of the market for
market entry and market departure cases.
• However, it usually will not lead you directly to an answer.

Therefore, use this framework to qualitatively assess the market
in conjunction with other quantitative, evaluative measures.
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Suppliers
• Supplier concentration
• Importance of volume
• Differentiation of inputs
• Impact of inputs on cost or differentiation
• Switching costs of firms
• Substitute inputs
• Threat of forward integration
• Cost relative to total input purchases
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Buyers
• Bargaining leverage
• Buyer volume
• Buyer information
• Brand identity
• Price sensitivity
• Threat of backward integration
• Product differentiation
• Buyer concentration
• Availability of substitutes
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Substitutes
• Switching costs
• Buyer inclination to substitute
• Price vs. performance trade-off of substitutes
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New Entrants
• Barriers to entry
• Cost advantages
• Access to inputs
• Government regulations
• Economies of scale
• Capital requirements
• Brand identity
• Switching costs
• Access to distribution
• Expected retaliation
• Proprietary products
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Rivalry
• Exit barriers
• Industry concentration
• Fixed costs
• Industry growth
• Diversity of rivals
• Corporate stakes
• Product differences
• Switching costs
• Brand
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The Three Cs
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The 3Cs
• Customers
• Competition
• Company
The 3Cs are used to understand the company environment, market

and expansion analysis, value chain modeling, etc.
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Customers
What questions would you ask about the customers?
• Who are they?

• How’s the market segmented?
• What is their decision-making process?
• How does price matter to them?
• Are the customers current needs not being met?
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Competition
What would you ask to access the competition?
• Who are they?

• How do they approach the market?
• Cost and pricing considerations
• Do they have a sustainable competitive advantage?
• Are there potential new competitors?
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Company
How would you analyze the internal capabilities of the company?
• How do YOU fare when put to the same analysis as your

competitors?
• Do you have capacity or construction constraints?
• What are you strengths and weaknesses? (SWOT)
• What is your financial position?
• Where do you fit in on the value chain?
– Where do you add value to the customer?
– What are your relationships with suppliers / distributors
– Are you vertically integrated? Can / should you be?
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Profitability Tree
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Profitability
Profit = Revenue – Costs

Revenue = Price * Volume
Costs = Fixed Costs + Variable
Costs
Therefore:
Profit = (Price*Volume) – Fixed Costs – Variable Costs
If profits are going down, then:
– Revenues are decreasing
and/or
– Costs are increasing
Profit = Revenue – Costs
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Profitability Tree
Profit
Revenue Cost
( Price X Quantity
) ( — Fixed + Variable )
• Changes in pricing • Customers • Capital equipment • Labor
structure • Market growing or • Land • Materials
• Price discrimination shrinking? • Buildings • Distribution
• Viability of pricing over • Changing demands • R&D?
time • Segmentation:
• Discounts or couponing New/existing
• Competitor’s pricing Loyal/ switchers
• Competitors
• New entrants
• New competitive action
• Company
• 4P’s: Product, price,
place, promotion
• Strengths/weaknesses
• Channel restrictions or
temporary disturbances
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Value/Supply Chain
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Value Chain: 3 Possibilities
1. Steps to get to a final product

Breaking down a business into steps can be very helpful for identifying issues
along each step. The steps serve as your “buckets” or framework.
Example: Doritos
Creation of Inputs Manufacturing Marketing Distribution Retail Customers
Note: this type of drawing is called a chevron.
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2. Internal
Allows analysis of activities within a given firm to create value and establish
competitive advantage.
Firm Infrastructure
Human resource management

Support Activities
Technology development
Procurement
Inbound Operations Outbound Marketing Service

Logistics Logistics Sales
Primary Activities
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3. External
Here the value chain is broken down into the companies involved in creating the
value. Each company may perform one of more of the steps.
Resources Product/Service
Focal
Supplier Customer
Firm
$$ $$
Creation of Inputs Manufacturing Marketing Distribution Retail Customers
Integration
Forward - When a firm takes over an activity that is closer to the end customer (ex: supplier takes marketing)
Backward – When a firm takes over an activity that is further away from the end customer (ex: focal firm takes
manufacturing)
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Value Creation
$
Willingness-to-Pay
Value received by Buyer

customer
Price
Value received by Firm

firm
Cost
Value received by
supplier Supplier
Opportunity Cost
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Value Chain Application
We’ve seen a value chain for an edible consumer good. Map out
value chains (as steps in the process of creating value) for the
following goods and services:
• Movies
• Healthcare Laboratory Tests
• National Security
• Office rental
• Insurance
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Value Chain/Creation Application
In which activity do the following companies create value and

establish a competitive advantage allowing them to earn above-
average profits in their industries?
• Google
• Southwest
• Dell
• Apple
• Coca-Cola
• McKinsey
• Others?
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Why Value Creation is Important
A firm that can create the most value in a chain can capture the
most value, meaning it will be more profitable than its competitors.
Customers will choose their product or service over their
competitors’, and suppliers will need to work with them.
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What is Supply Chain Management?
Supply Chain Management is the ability to get the:
Right Product to the

Right Place in the
Right Quantity at the
Right Time for the
Right Cost with
Error-Free Documentation.
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Supply Chain vs. Value Chain
• Supply chain relates to efficiency

– Cost reduction and productivity
• Value chain relates to effectiveness

– Creating the highest value for the customer
– Not necessarily the lowest cost approach!
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Supply Chain Network
Supply Inputs Transformation Localization Outputs

Network Provided by Of inputs into Of products and
suppliers products & services services
Manufacturing Suppliers Manufacturers Distribution Customers

Co. Chain
Ex.: Campbell Food Campbell’s To distribution
Soups ingredients, production plants centers  To local
cans & labels grocery stores
Service Suppliers Service Support Local Service Customers

Provider Chain Operations Providers
Ex.: Starbucks Starbucks Starbucks Starbucks on your
coffee Corporation local street corner
production develops consistent caters to local
operations needs: UES vs.
Astor Place
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The Four Ps
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What are the 4Ps?
• Product
• Pricing
• Placement
• Promotion
The 4Ps are used as a follow up or lead in with the 3Cs analysis.
They are often used to assess marketing possibilities.
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Product
What do you need to know about the firm’s products?
• What are its features, quality, target customer?

• Can it be differentiated?
• Is it new or existing?
• Who else can make it?
• What are the substitutes / complements?
• Does it fit or cannibalize products we currently make?
• Can we offer warranty service?
• What is the product mix?
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Pricing
There is more to pricing then the price tag:
• What is its ACTUAL price? Are there discounts; is the pricing

uniform (commodity) etc.?
• What is its price elasticity?
• How is the price determined?
• What’s the cost of the product?
• What is the cost structure?
• What are the margins?
• Can the costs be adjusted?
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Placement
What do you need to know about sales and distribution?
• How is the product positioned in the market and how large is the
market?
• How is it distributed?
• How much contact do we have with the end consumer?
• Who are the intermediaries and what are their margins?
• What is the time to market?
• How effective is our sales force?
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Promotion
What kind of effect does the marketing have?
• How is the product promoted?

• What’s the advertising strategy?
• What’s the budget and is it appropriate?
• Are there other special promotions / discounts?
• Are there cross-promotions with complementary products?
• What is packaging like? Is it enticing? Are there multiple sizing
or packaging options?
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BCG Matrix
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BCG matrix
Star ?
High
?
Industry
Growth Rate Cash Cow Dog
Low
High Low
Market Share
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The Seven Ss
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The 7Ss
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M&A
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Mergers & Acquisitions
Issues to Consider:
• Would the merger be successful?
– Is the objective for the acquisition/merger logical and possible?
• Enter a new market (new customers or products)
• Achieve greater economies of scale
– What are the synergies in the costs and revenues, as well as the core competencies of
the firms?
– What are potential issues of conflict that the client needs to manage (i.e. different IT
systems or corporate cultures)? Consider what problems it might encounter to cause
the integration to take more time/money than expected.
• Integration Approach
– How would you layout the strategy for Business Unit integration?
– What are the options for integration? What would you ask to assess the options?
– How would you measure success/failure of the projects?
• Technical Integration Approach
– Similar theme as above, might come up with firms with more tech emphasis (such as
IBM, DiamondCluster)
– Discussing project and program management issues
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Other issues to bear in mind
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Keep in Mind: Outsourcing & Offshoring
• Outsourcing is contracting with a third party to take over given

tasks, while offshoring is setting up an office abroad, run by
company’s management, while hiring local labor.
• Benefits
– Unload noncore activities
– Focus time, activities, and investments on core competencies
– Decrease costs
– Offshoring: low cost labor
• Challenges
– Determining what is core vs. noncore
– Outsourcing: Loss of control of quality
– Outsourcing: Exposure to risks of vendors
– Offshoring: Language barriers
• When making the outsourcing or offshoring decision, need to
determine the competitive advantage of the company.
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Keep in Mind: Mass Customization
• Delivering highly-customized products and services

– Postpones differentiation of products for a specific customer until
the latest possible point in supply chain
• Benefits
– Ability to charge price premium
– Increase in brand strength
• Challenges
– Higher costs
– Necessitates changes in manufacturing process
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Useful formulae
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NPV
Is the project a good investment?
1 - Estimate Future Cash Flows
– Revenues - Costs
2 - Estimate Discount Rates
– Look at comparables
– Often, the interviewer may provide this
3 - Attain Net Present Value (NPV)
– Discount future cash flows at appropriate discount rate
4 - Consider Other Synergies
– Reasons to go ahead despite negative NPV
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NPV
Is the project a good investment?
NPV = - CF0 + CF1 + CF2 + … + CFt

(1+r) (1+r)2 (1+r)t
where CFt = Annuity Cash Flow

(1+r)t
Special case: Cash flow in perpetuity

CFt = Perpetuity Cash Flow
r
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Breakeven Point
Breakeven is the point where gains equal losses.

In general, you might need to determine the breakeven point in order to
justify moving forward with an investment, or to identify how much volume
would be needed to produce to make the investment worthwhile.
Breakeven Point = Fixed Cost

Price per unit – Variable cost
This equation will present you with the volume that is necessary to
cover those fixed costs.
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Inventory Turnover
Cost of goods sold

Inventory Turnover = ---------------------------------
Average inventory value
Total value of all items held in

inventory for the firm valued at cost
Turnover tells you efficiency of company’s inventory management:

- High ratio means inventory does not remain in warehouses or on the
shelves but turns over rapidly from acquisition to sale.
- Low turnover might indicate that company is overproducing relative to
sales and marketing capabilities.
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Turnover vs. Margins
• Typically, inventory turnover varies by industry.

• Turnover tends to correlate with margins.
• High inventory turnover, low margins:
– Grocery stores
– Department stores
• Low inventory turnover, high margins:
– Tiffany’s, luxury goods retailers
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Replenishing Inventory
• The recent phenomenon of electronic data usage to monitor

inventory is illustrated by Walmart’s use of RFID’s.
• Restock methods:
– Continuous replenishment – most expensive
– Fixed-time vs. fixed-quantity
– Set replenishment volume vs. restock quantity by necessity
• What are benefits and risks of each?
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Tying it all together
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Starting to pull it together: MECE
• When “creating your own framework,” make sure that the

buckets you choose to frame the problem are MECE:
Mutually Exclusive & Collectively Exhaustive
– For example, if you were to use both Porter’s Five Forces and the
3C’s, and you named all eight buckets, you would be repeating the
Customer / Buyer buckets, as well as Competitors / Rivalry buckets.
This is not mutually exclusive!
– Likewise, if you were to only use Porter’s Five Forces you may be
missing internal company information (competitive advantage, how
it works, costs and revenues). This is not collectively exhaustive!
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Starting to pull it together: STREP
• If you start to hit a wall with the “typical“ buckets, the problem
may lie in external market factors.
S – Social (change in public awareness, health concerns)

T – Technological (IT developments, failures)
R – Regulatory (antitrust, import tariffs)
E – Economic (recessions)
P – Political (change in government, lobbying)
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Tying It Together
• Rarely can a case be solved by applying one framework.

• Rarely will all 3Cs or 4Ps be important to the solution of a case.
• Frameworks intersect with each other.
– Competition analysis is both one of the ‘Cs’ and one of the Porter’s
Five Forces.
• Work on developing your own “frameworks” – which concepts
may be useful to solving each particular case.
• A case specific “framework” can include 2 Ps, 1 C, and 2 of
Porter’s Five Forces, along with other concepts.
• Frameworks are tool to help you structure your own approach to
solving a case.
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The Classic Cases
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Declining Profitability
Example Case:
A Taiwanese manufacturer of lab test kits for laboratories in hospitals and
clinics has seen its annual profits decline from $78 m to $61 m over the
past three years. The company has hired you to determine what is
happening and to find a solution.
Steps:
1. Identify part(s) of Revenue that is falling or Costs that are increasing
(could be both)
2. Recommend a solution to address the falling revenue or increasing
costs.
Profit = Revenues - Costs
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Declining Profitability
Profit
Revenue Cost
( Price X Quantity
• Competitors
• New entrants
• New competitive action
• Company
place, promotion
• Channel restrictions or
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Declining Market Share
Example Case:
A regional auto insurance company recently discovered from a market
survey that their market share was declining significantly. Why did this
happen and what can be done?
Steps:
1. Determine whether:
The client’s volume is falling.
or
The market size is increasing with competitors capturing that new market.
or
Both.
2. Drill down to find the causes.
3. Recommend a solution.
Declining market share may come with declining profitability.
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Declining Market Share – a focus on quantity
Profit
Revenue Cost
( Price X Quantity
• Competitors
Consider these frameworks:
• New entrants
• New competitive action •internal/external with some Porter’s
• Company 5 forces on the external side
place, promotion •3 C’s
• Channel restrictions or •4P’s
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Market Entry
Example Case:
A national provider of in-home health care services is considering
purchasing a regional managed care facility with 250 physicians. What
factors should our client consider in making this decision?
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Market Entry
Issues to Consider:
• Attractiveness of Market
– Market size and growth potential
– Competition: # of key players, their market share (later: their price/cost positions,
differentiation)
– Barriers to entry (costs to enter, competitive reaction)
– Customers’ needs/desires?
• Client’s potential for market share/competitive advantage
– Internal resources/capabilities to meet customers’ desires
– Competitive strategy: Low cost or differentiation
– Where in the value chain will the client gain advantage and offer more value to customer
• Options for Market entry
– Build internal capability
– Establish a strategic partnership
– Acquire/merge
Some possible quantitative calculations:

– Market size/shares
– NPV analysis
– Breakeven point
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Acquisition/Merger
Example Case:
A company of chocolate and confectionery products is considering
acquiring a regional soft drink manufacturer. Are the distribution
synergies sufficient enough to justify an acquisition?
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Acquisition/Merger
Issues to Consider:
• Would the merger be successful?
– Is the objective for the acquisition/merger logical and possible?
• Enter a new market (new customers or products)
• Achieve greater economies of scale
– What are the synergies in the costs and revenues, as well as the core competencies of
the firms?
– What are potential issues of conflict that the client needs to manage (i.e. different IT
systems or corporate cultures)? Consider what problems it might encounter to cause the
integration to take more time/money than expected.
• Integration Approach
– How would you layout the strategy for Business Unit integration?
– What are the options for integration? What would you ask to assess the options?
– How would you measure success/failure of the projects?
• Technical Integration Approach
– Similar theme as above, might come up with firms with more tech emphasis (such as IBM,
DiamondCluster)
– Discussing project and program management issues
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Pricing
Example Case:
How should a major retailer price its services in the electronic and
appliance service business?
• Identify the type of market

–Monopoly
–Oligopoly
–Perfect competition
• Issues to Consider
–What the market will bear?
–Long-term effects of pricing decisions
–How the competition will respond to changes in pricing
–Elasticity of demand - the consumer’s sensitivity to price changes
–Methods to create price discrimination
–Using strategic tactics such as creating “loss leaders” or “traffic builders”
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Market Strategy
Example Cases:
How can Boeing and Airbus each compete in the airplane market?
Apple has taken over the personal music player market, which Sony
created with its introduction of the Walkman in 1979. How can Sony
combat Apple?
• Objective
– Define a competitive advantage for each player.
• Issues to consider
– SWOT for each
– Differentiation vs. low cost
– What are customer needs? Are there different customer segments?
– Where in the value chain does each player add value to its customers?
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Final Tips on Preparing for Consulting Interviews

• Practice, practice, practice
- Casing (on your own and with partners)
- Read cases with scripts as the solution
- When you do a case, always go back and note other things you could have
added
- When you give a case, always give specific constructive feedback
- Don’t always practice with your friends – you often get too comfortable.
Utilize organized casing sessions to case with others.
- Behavioral/Fit – practice your story with an OCD counselor until you can say it
smoothly in your sleep
• Drills
- Create your own flashcards to practice quick math in your head
- Practice longer calculations in front of someone
- Set up frameworks to cases (buckets with bullet points of questions to ask) and
practice summarizing your framework in 1 to 2 concise sentences
- Practice closing your cases with concise and data-driven recommendations
• Read the WSJ, Business Week, etc. to learn about other industries
and types of problems
- Even reading one article on an unfamiliar industry can introduce you to its
lingo, its general value chain, etc.
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Casing Boot Camp 2006

Other keys to case interviews

• Failing to stay structured

Market Sizing Cases

What is market sizing?

• A problem or question that asks you to estimate the size of a

A market sizing example

How big is the US Disposable Diaper Market

Two Methods for solving Market Sizing Cases….

• Top Down Approach

Total US # of Kids Assume 10% Assume 5 Assume 360 Assume $0.60

Two Methods for solving Market Sizing Cases….

Baby G uses 6 I live in SF – Assume 360 Approx 10,000 Assume each

How big is the US Television Market in

Two Methods for solving Market Sizing Cases….

Estimate how much revenue a gas station

Another market sizing example

– First, develop and state assumptions:

Market sizing example

• Start calculations. Organize and write clearly.

Peak Off Peak

10 transactions / hr (stands are fully utilized during

40 * 4 stands = 160 transactions / day 60 * 4 stands = 240 transactions / day

Total = 400 transactions / day

Market sizing example

• Continue assumptions. Use easy numbers!

• And remember, there is more than one way to solve a market

Helpful Facts to Remember…

Porter’s Five Forces

Porter’s Five Forces

Applying Porter’s Five Forces

• Porter’s Five Forces is useful for starting to analyze the

• However, it usually will not lead you directly to an answer.

The 3Cs are used to understand the company environment, market

What questions would you ask about the customers?

• Who are they?

What would you ask to access the competition?

• Who are they?

How would you analyze the internal capabilities of the company?

• How do YOU fare when put to the same analysis as your

Profit = Revenue – Costs

Profit = Revenue – Costs

Value Chain: 3 Possibilities

1. Steps to get to a final product

Creation of Inputs Manufacturing Marketing Distribution Retail Customers

Note: this type of drawing is called a chevron.

Value Chain: 3 Possibilities

Human resource management

Inbound Operations Outbound Marketing Service

Value Chain: 3 Possibilities

Creation of Inputs Manufacturing Marketing Distribution Retail Customers

Value received by Buyer

Value received by Firm

Value Chain Application

Value Chain/Creation Application

In which activity do the following companies create value and

Why Value Creation is Important

What is Supply Chain Management?

Supply Chain Management is the ability to get the:

Right Product to the

Supply Chain vs. Value Chain

• Supply chain relates to efficiency

• Value chain relates to effectiveness

Supply Chain Network