December 2007

Hello Ken,

I am confused with the identification of the primary activities in the value chain of this company:

Question:
Local neighbourhood shops are finding it increasingly difficult to compete with supermarkets. However, three years ago, the Perfect Shopper franchise group was launched that allowed these neighbourhood shops to join the group and achieve cost savings on tinned and packaged goods, particularly groceries. Perfect Shopper purchases branded goods in bulk from established food suppliers and stores them in large purpose-built warehouses, each designed to serve a geographical region. When Perfect Shopper was established it decided that deliveries to these warehouses should be made by the food suppliers or by haulage contractors working on behalf of these suppliers. Perfect Shopper places orders with these suppliers and the supplier arranges the delivery to the warehouse. These arrangements are still in place. Perfect Shopper has no branded goods of its own.

I’m sorry Ken, for some odd reason I couldn’t post anything on this forum. Even if I could I could only post one paragraph – if I tried a longer paragraph my post would have not gone through. I’ve been trying to post something here since yesterday.

The above post was not complete- I’m sorry again. I don’t think I can post the full question here for your easy reference now, so I’ll get to the point. What I meant to ask was:

My question:
I do not understand how “three monthly meeting between franchisee and representative” could be classified under “service”. Shouldn’t it have been under “outbound logistics” instead?

Whereas in BPP revision kit, the answer says that that should be under “Marketing and sales” because it is because of this ordering process that persuades the neighborhood shops to enter into a contract with Perfect Shopper.

I am so terribly confused right now..

Hoping for your help on this, thank you!