The value delivery system

Choose Provide Communicate Capture

the the the the
Value Value Value Value

• Customer • Co-create • Proclaim the • Understand the

insight solutions to value cost-to-serve
• Capability buying problems proposition • What is the
assessment • Use value- • Develop a channel margin
adding partners shared vision and who receives
it?

Source: Lanning, M.J. and Michaels, E. G., ‘A business is a value delivery system’,
McKinsey & Co., Inc., June 1998

1
Key issues for channel strategy

Effectiveness Efficiency

• How well do our • Do we understand the

channels cover the true cost-to-serve of our
market? different channels?

• How well do our • Are we surrendering too

channels meet out much channel margin?
customers’ needs?
• Have we explored all the
• Are our channels opportunities for cross-
building a competitive channel synergies?
advantage for us?

CHANNEL STRATEGY

Environment

• How are customers’

expectations changing?

• What new opportunities for

value creation are emerging?

• Where might we be vulnerable

to future channel disruptions?

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From single channel to omni-channel

Single channel

D.C. STORE

Multi channel

D.C. HOME

D.C. STORE

Omni Channel

HOME

D.C. STORE

D.C. = Distribution Centre CLICK & COLLECT