The demand chain as an integral component of the value chain

The term “value chain” encompasses a variety of ideas and concepts. This paper identifies two major themes: a “macro” perspective of how markets operate and, at the other extreme, a process‐driven “micro” view of the individual firm itself. Focusing on the latter in particular, it seems that corporate emphasis is increasingly efficiency based with the prime objective the reduction of costs. The recent difficulties experienced by McDonald's, Sainsbury and Marks & Spencer may be due in part to a single‐minded focus on supply‐chain management. Instead it is argued that a firm is best placed to create value and exploit market opportunities when there is an effective combination of supply‐chain capabilities and demand‐chain effectiveness to maximise the organisation's overall value chain. These issues are explored using practical examples from the retail and fast food industries. Questions whether traditional views of marketing are broad enough or whether, just as the logistics manager reinvented himself as the supply‐chain manager and the new corporate hero, the marketing professional needs to reinvent himself as the demand‐chain manager.