Each company department can be thought of as a link in the company’s value chain. That is, each department carries out value creating activities to design produce, marketing, deliver, and supported the firm’s products. The firm’s success depends not only on how well each department performs its work but also on how well the activities of various departments are coordinated.
However, the marketing department needs help from the company’s other departments. Wal-Marts ability to offer the right products at low prices depends on the purchasing department’s skill in developing the needed suppliers and buying from them at low cost.
A company’s value chain is only as strong as its weakest link. Success depends on how well each department performs its work of adding customer value and on how well the activities of various departments are coordinated. At Wal-Mart, if purchasing can’t wring the lowest prices from suppliers then marketing can’t deliver on its promise of lowest prices.