1.1 Traditional approaches to business

This figure shows the traditional product-oriented system to a business in the form of a basic flow chart. The flow chart goes from: ‘Create the product’ to ‘Make the product’ and then finally ‘Sell the product’.

This figure shows the McKinsey’s value delivery system to a business in the form of a basic flow chart. The flow chart has three stages: Choose the value, Provide the value and Communicate the value to the customer. Underneath Choose the value are examples of this: understand value drivers; Select target and Define benefits, price. Underneath Provide the value are the examples: Product, process, design; Procurement, manufacturing; Distribution; Service; Price. Underneath Communicate the value to the customer are the examples: Sales message; Advertising; Promoting, public relations.