VALUE CHAIN ANALYSIS

SUBMITTED BY:
Kamal Manwani Nitin Sharma

EVOLUTION
Developed in 1985

Given by

MICHAEL PORTER

INTRODUCTION
VALUE CHAIN ANALYSIS is one of the technique that are useful in understanding and analyzing both INTRA-ORGANISATION and

INTER-ORGANISATION in understanding and

analyzing both processes in order to identify

sources of competitive advantage.

SIX BUSINESS FUNCTIONS OF THE VALUE CHAIN

RESEARCH AND DEVELOPMENT DESIGN OF PRODUCTS, SERVICE PRODUCTION MARKETING & SALES DISTRIBUTION CUSTOMER SERVICE

End-Use Consumer Pays for Profit Margins Throughout the Value Chain

Primary Activities
Supplier Value Chain R&D

Support Activities

Service Firm Z Value Chain

Design

Service Production Distribution Value Chain Marketing Buyer Value Chain

Service

Distribution

Service

Disposal Value Chain

Service

CLASSIFICATION
PRIMARY ACTIVITIES II. SUPPORT ACTIVITIES (SECONDARY ACTIVITIES)
I.

PRIMARY ACTIVITIES
INBOUND LOGISTICS OPERATIONS OUTBOUND LOGISTICS MARKETING AND SALES SERVICE

SUPPORT ACTIVITES
PROCUREMENT TECHNOLOGY DEVELOPMENT HUMAN RESOURCE MANAGEMENT FIRM INFRASTRUCTURE

Value Chain Model from Michael E. Porters Competitive Advantage

SUPPORT ACTIVITIES
Firm Infrastructure (General Management) Human Resource Management Technology Development Procurement Inbound Logistics Ops. Outbound Logistics Sales & Marketing Service and Support

PRIMARY ACTIVITIES

VALUE CHAIN ANALYSIS IS A THREE-STEP PROCESS

ACTIVITY ANALYSIS
VALUE ANALYSIS EVALUATION AND PLANNING

Developing Value Chains

Value Chain Analysis requires expertise in more than one

area

Competitive intelligence is to be gathered ethically And then developing a systematic process for capturing, analyzing it and disseminating the intelligence and developing the appropriate strategies to enhance your competitiveness.

How a firm can use Value Chain Analysis

Three useful strategic frameworks have been identified for value chain analysis:

Industry Structure Analysis Core Competencies

Segmentation Analysis

Value Chain Benefits

VC allows alignment of processes with customers. This

generates a quality advantage.

VC focuses cost management efforts. VC provides for efficient processes which improves the

timeliness of operations.
VC increase competitiveness. VC improve your market share.
Bottom Line - improve overall profitability!

CONCLUSION
THE VALUE CHAIN FRAMEWORK SHOWS THAT THE

VALUE CHAIN OF A COMPANY MAY BE USEFUL IN

IDENTIFYING AND UNDERSTANDING CRUCIAL ASPECTS TO ACHIEVE COMPETITIVE STRENGTHS AND CORE COMPETENCIES IN THE MARKET PLACE. THIS MODEL ALSO REVEALS HOW THE VALUE

CHAIN

ACTIVITIES

ARE

TIED

TOGETHER

TO

ULTIMATELY CREAT VALUE FOR THE CUSTOMER.