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for themselves — a critical dis- tinction all too often overlooked by market innovators. Xerox is the classic example. Its Palo Alto Research Center (PARC) was responsible for some of the most groundbreaking innova- tions in the PC age, among them the graphical user interface popularized by Apple and later Microsoft, as well as the laser printer commercialized by Canon. Xerox did not know how to manage and capture the value it created.

“LOOK BOTH WAYS” IN THE VALUE CHAIN

do I want to be?” rather than “How can I make the best of what I have?”

Companies seeking to restructure their value chains need to look both ways, not only toward the end-customer but toward the supplier. They need to step back and reassess the value in every- thing they do, not only from a supply chain perspective, but also from a customer requirements perspective. In so doing, they look into the future and ask themselves the question “What

Each company’s value chain has multiple dimensions, along which products, processes, and information flow. Companies should assess the full range of opportunities available to them to create and capture value. While execution and engineering opportunities may be more obvious and more immediate in their payoff, innovation stream

Exhibit 6. Automotive Value Chain: Before and After

AUTOMOTIVE VALUE CHAIN

Online Sales

  • eVisteon

Secondary

Suppliers

Vehicle

Suppliers

Manufacturers

Online Bid

Online Bid/ Auctions

  • eVisteon

  • Covisint

  • Freemarketsonline

  • fordsuppliernetwork

  • gmsupplier.com

Traditional linkage New linkages

Manufacturer- Owned Sites

Online Auction

  • GMbuyer.com

  • barchettafial

  • ford.com

  • mercedes.com

  • toyota.com

  • wholesaleautobytel

  • manheimonline

Dealers

Consumers

Online Auto Services

autobytel

autotradecenter

carsclub

priceline

dealernet

carsmart

  • carpoint

  • driveoff

Online Services Vertically Integrated with Dealer

  • autonationdirect

  • carorder

  • carsdirect

Financial Services

  • Giggo (Chrysler)

  • Nations Bank/ Banc America

  • Lendingtree Parts and Accessories

  • 4yakima.com

  • Nokia

  • AT&T

  • BendixDirect

  • Visteon Service and Maintenance

  • Midas

  • JiffyLube

  • Wal*Mart

  • Goodyear Consumer Services

  • AAA

  • Car Club

Source: Booz Allen & Hamilton

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