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1.18 The Role of the Supply Chain and the Brand in Product Differentiation

Differentiation should be the engine driving the business, but businesses must also attend to improving the supply chain and the brand in order to succeed. Improving the supply chain and improving the brand image are also methods for product differentiation. They contribute to the unique bundle of perceptions that customers have towards a business.

The supply chainThe creation of a product or service up through the delivery of the product to the customer. is the connected activities related to the creation of a product or service up through the delivery of the product to the customer. It includes the upstream suppliers as well as downstream activities such as wholesalers and distribution warehouses and after sales support.In general, the terms value chain and supply chain can be used interchangeably, although the value chain is rooted in the strategic planning literature whereas the supply chain is linked to the work in the operations management area. Key activities for improving the supply chain are to reduce transaction costs to improve business processes. Consumers often perceive efficient and responsive supply chains as an attribute or a product feature.

The brandThe image of a product or service in the marketplace. is the image of a product or service in the marketplace. Consumers essentially perceive the brand as being a feature of the product and, in many instances, it is viewed as the avatar for the product. Images and visions are immediately invoked when mentioning Apple, or Amazon, Google, Wal-Mart, and Disney. Our focus in this book will be on the process of innovation and differentiation, but we also recognize that successful companies must attend to improving the supply chain and developing a strong brand.