Linkages exist when the way in which one activity is performed affects the cost or effectiveness of other activities.Linkagesoftencreatetrade-offsinperform-ing differentactivities thatshould beoptimized. This optimization may require trade-offs. For example, a more costly product design and more expensive raw materials can reduce after-sale service costs. A com-panymustresolvesuchtrade-offs,inaccordancewith its strategy, to achieve competitive advantage.
Linkages also require activities to be coordinated. On-time delivery requires that operations, outbound logistics, and service activities (installation, for ex-ample) should function smoothly together. Good co-ordination allows on-time delivery without the need for costly inventory.Careful management oflinkages is often a powerful source of competitive advantage because of the difficulty rivals have in perceiving themandinresolvingtrade-offsacrossorganizational lines.