Pizza Hut

As another example, lets look at the value chain of Pizza Hut:

Primary activities

Inbound logistics: This includes all of the sourcing activities to

procure and standardize all of the produce, ingredients and
materials to bake pizzas fast, consistently, and delicious in house.
They capitalize on economies of scale, and use massive global
purchase orders to source the best prices on raw products for their
restaurants.

Operations: By targeting areas where there is an affinity for Italian

food, Pizza Hut operates in a huge number of countries globally with
a licensing model where stores are managed by a local franchise
owner.

Outbound logistics: There are two models that Pizza Hut capitalizes
on, in store dining and their home delivery service.

Marketing and Sales: There is a large investment in marketing to

drive additional sales, and compete with the other fast food chains.

Service: The entire goal of Pizza Hut is to offer value to their

customers in affordable and convenient pizza that everyone can
enjoy.

Support activities

Infrastructure: Again, this includes every other activity that is

required to keep the stores in business, such as finance, legal, etc.

Human Resources: To keep the costs down staff are typically junior,
and unskilled.

Technological development: The process they have created to have

unskilled chefs cooking the pizza is their biggest asset. Breaking
 down the complicated method into simple steps that can be repeated
again and again for consistently great pizza.

Procurement: The purchasing and activities required to produce the

pizza, the raw food, and all of the buildings, and equipment needed
to cook and deliver the pizzas.

Based on these activities, Pizza Hut is leading the market in producing

pizza that is both affordable, and can be delivered to your door in under
30 minutes (in most cities). This convenience is what sets them apart from
many other competing options for meals, like going out to dinner or
preparing a meal at home yourself, and they use a strong campaign and
marketing focus to entice customers to use them over similar competitors
in the fast food delivery industry.

Take the steps outlined above and apply the same methodology to your
company. Are you competing on a cost basis, or are you targeting a
differentiation strategy? If there are any customers that you can rely on for
feedback, it is also worthwhile to present your conclusions to them from
your own analysis, to either confirm youre correct, or to get an even better
understanding of what it is that they want. If your business is in the tech
industry, or primarily online, you can still create value for customers, this
course offers a great insight in how to identify your internet
value chain.

Doing a value chain analysis is a fantastic way of following a process to

review all of the ways you can generate value for your customers. When
you review all of these in detail, youll find that you come across many
different ways you can satisfy your customers even more. If its your first
time performing this type of analysis, this course is perfect to teach
you the project management skills you need in value chain
analysis. Building on this, all you really need to do is take action and
make a plan on the changes that are needed within your production
process.

Very soon you be excelling in all the things that really matter to your
customers. Thats when youll have real success!
Starbucks
Primary activities

Inbound logistics: This refers to the agents of the company

purchasing coffee beans in Africa, communicating the importance of
quality standards in the coffee beans and building strategic
partnerships with suppliers.

Operations: Starbucks is currently in over 50 countries, with both

direct stores operated by the company and licensing deals.

Outbound logistics: The normal process is Starbucks selling their

products in store without any intermediaries. Recently, there are
now retail products available in select supermarket chains.

Marketing and Sales: There is no heavy investment in marketing,

but specials and tastings are common, especially when new stores
open.

Service: One of their main objectives is to provide superior levels of

customer service.

Support activities

Infrastructure: This is all of the general activities that are required

to keep the stores operational, like management, finance, legal
support and government relations.

Human Resources: There are a wide range of training programs

available for staff, who are considered to be one of Starbucks most
important resources.
 Technological development: They make use of technology to save
costs, and deliver a consistent tasting coffee, anywhere in the world.

Procurement: All the purchasing that is required to produce the end

products, like the coffee beans, raw food items as well as the
buildings, and machinery.

Based on the mix of activities above, Starbucks has capitalized on an

international demand for delicious coffee, that has guests coming back
again and again to experience the superior levels of service, and a coffee
that always tastes great. If youre interested in focusing on customer
service, this recent post outlines many great ways that you can improve
your own organizations customer service.