This document discusses four case studies of companies that have implemented value chain activities from Porter's value chain model: 1) UPS uses barcoding and tracking technology in its operations to efficiently distribute and deliver packages. 2) Dunkin' Donuts increased sales by 9-20% in Italy through an SMS advertising campaign offering customers coupons. 3) Virgin Megastores improved communication between headquarters and retail stores by implementing a unified communication system, saving $50,000 annually. 4) M-Pesa, launched by Safaricom in Kenya, allows users to deposit, send, and withdraw money using mobile phones, reaching over 7 million users conducting 2 million daily transactions.

1. IS 746 - ASSIGNMENT 3: Four activities from Porter’s Value Chain
UPS BARCODING AND TRACKING SYSTEM
DUNKIN’ DONUTS SMS ADVERTISING
VIRGIN MEGASTORES’ UNIFIED COMMUNICATION SYSTEM
KENYA’S M-PESA: MOBILE MONEY TRANSFER SYSTEM
Fatih Özlü
1777762
Middle East Technical University
29 May, 2011
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2. CONTENTS
1. UPS BARCODING AND TRACKING SYSTEM ............................................................ 3
1.1. Company Name ....................................................................................................................... 3
1.2. Related Porter's Value Chain Activity ...................................................................................... 3
1.3. Description .............................................................................................................................. 3
1.4. References ............................................................................................................................... 4
2. DUNKIN’ DONUTS SMS ADVERTISING ..................................................................... 5
2.1. Company Name ....................................................................................................................... 5
2.2. Related Porter's Value Chain Activity ...................................................................................... 5
2.3. Description .............................................................................................................................. 5
2.4. References ............................................................................................................................... 6
3. VIRGIN MEGASTORES’ UNIFIED COMMUNICATION SYSTEM ........................... 7
3.1. Company Name ....................................................................................................................... 7
3.2. Related Porter's Value Chain Activity ...................................................................................... 7
3.3. Description .............................................................................................................................. 7
3.4. References ............................................................................................................................... 8
4. KENYA’S M-PESA: MOBILE MONEY TRANSFER SYSTEM ................................... 9
4.1. Company Name ....................................................................................................................... 9
4.2. Related Porter's Value Chain Activity ...................................................................................... 9
4.3. Description .............................................................................................................................. 9
4.4. References ............................................................................................................................. 10
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3. 1. UPS BARCODING AND TRACKING SYSTEM
1.1.Company Name
UPS (United Parcel Service)
1.2.Related Porter's Value Chain Activity
Primary Activity: Operations
1.3.Description
United Parcel Service (UPS) began to its business from a small sized package distribution
service in 1907 with $100 in debt. And it has been taken more than 100 years to become
world’s largest package delivery company. Now, it reached to large amount of numbers that is
more than 15 million package deliveries at 24 hour to more than 6 million customers in more
than 220 countries and territories around the world [3]. The company has to compete with its
other competitors in the package delivery. So it has its advanced information technology to
make company more profitable and customers more grateful.
UPS began its evolution with scanning barcode label system attached to package that includes
sender, destination, arrival time, etc information. So customers can follow their packages over
internet from web site of the UPS system that stores each packages with labeled information
and the current place of the packages. By updating package status and position information
with barcode labeling, all distribution information can be collected and managed over a
centralized system. It provides to distribute, deliver packages, or even determine most
efficient route for each driver by saving time and fuel with considering traffic and weather
conditions. Each UPS driver picks up a smart computer called Delivery Information
Acquision Device (DIAD), which has ability to connect and retrieve data from central system.
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4. And it provides drivers package tracking information and also drivers can stores the current
delivery status of the packages from their computers. In addition, customers can reach to up-
time package delivery information from Web to check their packages’ information.
The company has many advantages by using this system such as 28 million miles delivery
trucks save or consuming 3 million less fuel for a year. The system has also facilities for UPS
managers and customers tracking packages, checking delivery routes, and also time
determination. So for UPS company managers, it is easy to reach to up-to-date all services
information that adds a great ability to manage supply chain management, forecast, and
determine customer royalty, so on.
1.4.References
 [1] http://emlab.qust.edu.cn/userfiles/2009-3-8/file/UPS.pdf
 [2] http://compass.ups.com/supplychain/default.aspx
 [3] http://en.wikipedia.org/wiki/United_Parcel_Service
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5. 2. DUNKIN’ DONUTS SMS ADVERTISING
2.1.Company Name
Dunkin’ Donuts
2.2.Related Porter's Value Chain Activity
Primary Activity: Sales and Marketing
2.3.Description
Dunkin’ Donuts is an international coffee and donut seller company with 9 700 restaurants in
the 31 countries all over the world. It has more than half of all the locations in the US. The
company focuses on the baked goods, sandwiches, beverages and mostly coffee in the
business market with competitors Starbucks, Krispy Kreme and Tim Hortons, etc.
The company tries several advertising methods to increase sales and market profit among the
competitors. Dunkin’ Donuts also has advertising deals with many sports teams like Boston
Red Sox and the New England Patriots. It has also sponsorship with many other professional
sports teams like New York Yankees, Dallas Cowboys, New York Mets, Tampa Bay Rays.
The company has used SMS based advertising campaign in Italy. The advertising method is
very brief and cheaper to apply. Customers get coupons for the products from Dunkin’ Donut
via using their mobile phones with responding to campaign text messages from the company,
billboard advertisements or radio advertisements. Customers get a special offer or free coupon
as a gift that can be used from stores, after sending text message with promotion code. The
return of the campaign resulted in about 9% increase in sales in the Rome branch stores with
20% increase in overall sales, in the first three weeks period.
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6. About 82% of SMS responders came in to Dunkin’ Donuts stores and mostly in a 24 hour
time. So it brings more profit and effective advertising. Dunkin’ Donuts aims to reach to their
core customers by using SMS based marketing because lots of the SMS users are young and
so most probable customers for the company. It shows us how a big market to advertise your
offers, when thinking of millions of mobile phone users.
2.4.References
 [1] http://www.dunkindonuts.com/
 [2] http://chiefmarketer.com/advertising/digital/dunkin-donuts-071906/
 [3] http://en.wikipedia.org/wiki/Dunkin%27_Donuts
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7. 3. VIRGIN MEGASTORES’ UNIFIED COMMUNICATION SYSTEM
3.1.Company Name
Virgin Megastores
3.2.Related Porter's Value Chain Activity
Support Activity: Firm Infrastructure
3.3.Description
Virgin Megastore is an international company that sells books, CDs, DVDs, video games,
magazines and clothing products It has hundreds of stores all over the world countries like
France, Germany, Greece, The Netherlands, Spain, US and even Turkey, etc. The company
has to manage and operate its activities in an efficient manner to keep prices down, because
the market has a competitive environment like Wal-Mart and other online music download
companies.
Virgin Megastores has more than 1400 employees from 11 retail stores in the US. Information
stored in the center office is shared with the retailers via e-mails, voice mails and audio
conference calls to determine upcoming promotions, offers and events. The retailers generally
use email messages to share information which is less effective and time consuming way of
communication when compared to interactive audio conference. The reason for less audio
conference calling usage is that it costs much more money. So it causes to less effective
communication among the retailers and information exchange.
To increase interaction between home office and the retailers, the company started to use
Microsoft’s Office Communication Server product in 2007. This technology contains
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8. integrated voice mail, email, instant messaging and conference calling. From the conferencing
and collaboration tool, online employer’s availability can be checked, the usage of the system
can be checked (the user is already using the phone or in a conference), or other capabilities
are used like video conference with a camera or forwarding voice mails or emails to
employers.
The company has saved 50 000$ for a year after using the Microsoft’s Tool. It decreased
conference call costs and provided more efficient information communication.
3.4.References
 [1] http://www.virgin.com/company/virgin-megastore
 [2] http://download.microsoft.com/download/a/b/d/abdb3a6c-ea51-4c7c-86f5-
d44d44cb9d66/VirginMegastores_UCVoice_Final.doc
 [3]
http://www.cio.com/article/181550/How_to_Get_the_Most_From_Unified_Communicati
ons, John Edwards, February 08, 2008.
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9. 4. KENYA’S M-PESA: MOBILE MONEY TRANSFER SYSTEM
4.1.Company Name
Safaricom (affiliate of Vodafone) in Kenya.
4.2.Related Porter's Value Chain Activity
Primary Activity: Service
4.3.Description
M-PESA is the Vodafone’s mobile phone based money transfer system. “M” and “PESA” are
the abbreviations of “mobile” and “Swahili (Kenya and Tanzania and commonly in east,
central Africa) money”, respectively. The service was initially created in Kenya by the
Safaricom, which is the leading cell phone company [2] in Kenya, in March 2007. M-PESA
system allows users to deposit, send, withdraw money, transfer money to other users, and pay
bills by using their mobile phones. It is a banking system service that provides users to make
money payment transactions without going to any bank branch. The system also allows users
to pay school fees, taxes and even salaries [3].
Safaricom takes deposits from users who has Safaricom SIM card and also registered to the M-PESA
system as a user. Registration step is too simple, not so hard as to open a bank account, only national
Id card or a passport is necessary to be registered. Each user account is stored on the system with e-
money equivalent to real money. Depositing money is free for users, but to withdraw money, users
have to pay about $1 for a $100 transfer or cash.
After Safaricom started the system in Kenya, in 2007, M-PESA has reached many users
quickly and get the top position in the mobile phone based financial service all over the
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10. developing world. The average number of new registrations to the system per day reached to
5 000 to 10 000 users per a day. M-PESA has reached to nearly 7.7 million users [2] who
have been registered and have account, in August 2009 and makes more than 2 million daily
transactions in Kenya alone [4].
Though the system is not developed to replace the banking system, it has caught a success of
that takes place nearly half size of the average ATM (Automatic Teller Machine) transactions.
So it reveals that M-PESA system has taken place in the market in which it contains customer
based financial services.
4.4.References
 [1] http://www.vodacom.co.za/vodacom/services/M-PESA, 15th February 2011.
 [2] www.mit.edu/~tavneet/M-PESA.pdf, The Economics of M-PESA, William JACK,
and Tavneet SURI, August, 2010.
 [3] http://www.somalipress.com/news/2011-feb-15/development-experts-ring-kenyas-
mobile-money-success-story.html
 [4] http://en.wikipedia.org/wiki/M-Pesa
 [5] http://www.safaricom.co.ke/index.php?id=250
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