Concept of value chain
• The marketing environment consists of the task
environment and the broad environment.
• The task environment includes the actors engaged in
producing, distributing and promoting the offering. These are
the company suppliers, distributors, dealers and the target
• The broad environment consists of six components:
• The Political Environment
Laws, government agencies and pressure groups that
influence and limit various organizations and
individuals in a given society.
• The Economic Environment
The factors that affect consumer buying power and
Nations vary greatly in their level of distribution of
income (subsistence or agricultural Vs industrial
PEST Analysis Contd..
• Technological Environment
Forces that create new technologies, creating new
product and market opportunities
• The Social Environment
Institutions and other forces that affect society’s basic
values, perceptions, preferences and behaviors.
• A final and necessary step of the strategic analysis
involves bringing together the critical strengths,
Weaknesses, Opportunities and Threats in such a way
that strategy options are immediately obvious.
• To discover strengths and weaknesses we look at the
internal analysis (managerial processes). Similarly we
can obtain a good indication of opportunities and
threats by looking at PEST analysis.
• The SWOT is a valuable tool in visualizing strategic
options and searching possible alternative strategies for
• Satisfaction reflects a person’s judgements of a
product’s perceived performance (or outcome) in
relationship to expectations. If the performance falls
short of expectations, the customer is dissatisfied
and disappointed. If it matches expectations, the
customer is satisfied. If it exceeds then, the
customer is delighted.
• Value reflects the sum of the perceived tangible and
in tangible benefits and costs to customers. It’s
primarily a combination of quality, service, and price
(“qsp”), called the customer value triad.
Value Chain Concept
• A value chain is a chain of activities that a firm
operating in a specific industry performs in order to
deliver a valuable product or service to the market.