Each company department can be thought of as a link in the company’s internal value chain.9 That is, each department carries out value-creating activities to design, produce, market, deliver, and support the firm’s products. The firm’s success depends not only on how well each department performs its work but also on how well the various departments coordinate their activities.

For example, True Value Hardware’s goal is to create customer value and satisfaction by providing shoppers with the hardware and home improvement products they need at affordable prices along with top-notch customer service. Marketers at the retail-owned cooperative play an important role. They learn what customers need and help the 3,500 independent True Value retailers stock their store shelves with the desired products at competitive prices. They prepare advertising and merchandising programs and assist shoppers with customer service. Through these and other activities, True Value marketers help deliver value to customers.

However, True Value’s marketers, both at the home office and in stores, need help from the company’s other functions. True Value’s ability to help you “Start Right. Start Here.” depends on purchasing’s skill in developing the needed suppliers and buying from them at low cost. True Value’s information technology people must provide fast and accurate information about which products are selling in each store. And its operations people must provide effective, low-cost merchandise handling and delivery.

A company’s value chain is only as strong as its weakest link. Success depends on how well each group performs its work of adding customer value and on how the company coordinates the activities of various functions. True Value’s marketing ­campaign—“Behind Every Project Is a True Value”—­recognizes the importance of having everyone in the organization—from in-store managers and employees to home-office operations managers and marketing research analysts—understand the needs and aspirations of the chain’s do-it-yourself customers and help them handle home improvement projects.

Ideally, then, a company’s different functions should work in harmony to produce value for consumers. But, in practice, interdepartmental relations are full of conflicts and misunderstandings. The marketing department takes the consumer’s point of view. But when marketing tries to improve customer satisfaction, it can cause other departments to do a poorer job in their terms. Marketing department actions can increase purchasing costs, disrupt production schedules, increase inventories, and create budget headaches. Thus, other departments may resist the marketing department’s efforts.

Yet marketers must find ways to get all departments to “think consumer” and develop a smoothly functioning value chain. One marketing expert puts it this way: “Engaging customers today requires commitment from the entire company. We’re all marketers now.”10 Thus, whether you’re an accountant, an operations manager, a financial analyst, an IT specialist, or a human resources manager, you need to understand marketing and your role in creating customer value.

In its quest to engage customers and create customer value, the firm needs to look beyond its own internal value chain and into the value chains of its suppliers, its distributors, and, ultimately, its customers. Consider McDonald’s. People do not swarm to McDonald’s only because they love the chain’s hamburgers. Consumers flock to the McDonald’s system, not only to its food products. Throughout the world, McDonald’s finely tuned value delivery system delivers a high standard of QSCV—quality, service, cleanliness, and value. McDonald’s is effective only to the extent that it successfully partners with its franchisees, suppliers, and others to jointly create “our customers’ favorite place and way to eat.”

More companies today are partnering with other members of the supply chain—­suppliers, distributors, and, ultimately, customers—to improve the performance of the customer value delivery network. Competition no longer takes place only between individual competitors. Rather, it takes place between the entire value delivery network created by these competitors. Thus, Ford’s performance against Toyota depends on the quality of Ford’s overall value delivery network versus Toyota’s. Even if Ford makes the best cars, it might lose in the marketplace if Toyota’s dealer network provides a more customer-­satisfying sales and service experience.