Decision: Value Chain Strategy

Every human endeavor has a business model.  There’s no such thing as a free lunch; there’s likely a series (or chain) of value-for-value transactions that brought the food to your table.  In the Decision Driven® Strategy pattern, we call this decision, Value Chain Strategy.  We frame this decision as “What is our fundamental business model?  What segments of the customer value chain will we serve?”

There are many ways to slice up a value chain into roles or segments.   However you slice it in your industry, your organization will likely choose to play one or a few roles in the entire end-to-end value delivery process.  There are a few organizations that are “vertically-integrated” and control every step in the process (raw materials to finished goods to life cycle support), but these are rare.

Value Chain Strategy - Tree

Value Chain Strategy – Tree

For every value chain role you decide to keep “in-house”, you should think through your Differentiation Strategy.  How will you play this role better than others?  Why should you be in this part of the business?

Under Differentiation Strategy, there are several more decisions to consider.  You may have a unique approach to creating value for the customer.  You may have a new way spin to your business model that exchanges value at different transaction points.  You may have a unique business architecture – a way to split up the value-creating roles.  Some folks call this “Ecosystem Design” as an analogy with the complex interactions (e.g. food chain) among creatures in nature.

You can use the decisions in the Value Chain Strategy branch as an innovation framework.  Capture your current value chain segments, differentiation strategies, etc. and then brainstorm multiple new answers for each decision.  Combine these answers in unique ways to shift your position/role in the value chain.

Value Chain Strategy - Table

Value Chain Strategy – Table

Decision Driven® Strategy is the result of value chain innovation.  For many years my role has been either:

  • Methods Researcher – Methods Innovator
  • Consulting Services Provider

These efforts created quite a few methods innovations and uncovered decision patterns that have been boiled into the Decision Driven® Solutions Framework (DDSF).  So now my role is shifting toward:

  • Decision Management Platform Provider

Where I help users leverage the Decision Driven® Solutions Framework to take control of their own future by grasping their decision “control knobs”.

Don’t wait to refresh your value chain strategy by starting a free trial of the Decision Driven® Solutions Framework (DDSF). Please contact the Decision Driven® Solutions team at trial@decisiondriven.com or solutions@decisiondriven.com.

About decisiondriven

Innovator in Decision Management, Systems Thinking and System Engineering methods and tools
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