Using value‐chain analysis to discover customers' strategic needs

Abstract

Purpose

The paper aims to offer a five‐step method for discovering a customer's particular strategic needs based on a unique application of value‐chain analysis.

Design/methodology/approach

The paper presents a five‐step approach. Step 1 explains how internal and external value chains can be used separately and in related ways. Step 2 shows how to construct a customer's value chain. Step 3 shows how to identify the customer's business strategy by examining this value chain and using other kinds of information. Step 4 explains how to use additional information and intelligence to leverage that understanding into strategic needs and priorities. Step 5 explains how a firm's marketing function can best use this method of value‐chain analysis as a new strategic capability.

Findings

The benefits for doing this analysis on important customers include: identifying new high value business opportunities (and improving revenue); and strengthening the business‐to‐business (B2B) customer relationship: clarifying their strategic priorities allows enhanced alignment of actions with desired results.

Practical implications

A value‐chain analysis – combined with other kinds of information –is key to discovering the B2B customers' strategic needs and creating new business that will not only get a receptive audience but also command premium margins.

Originality/value

For B2B service companies, it is the external value chain that presents many new opportunities for business growth. Even though these processes occur outside the corporation, the strategic opportunities they reveal and areas of risk they highlight warrant careful study.

Citation

Crain, D.W. and Abraham, S. (2008), "Using value‐chain analysis to discover customers' strategic needs", Strategy & Leadership, Vol. 36 No. 4, pp. 29-39. https://doi.org/10.1108/10878570810888759