An analysis of porters value chain

In order for a firm to create competitive advantage, it needs to create a set of activites that can deliver value to the specific product and services it offers to its customers. To start talking about my life as a “value chain”, I may need to compare it to a specific product”. This is going to take precedence both in my personal life and professional life.

The value chain, made by Michael Porter, is really important to see how a company structure is created. The value chain is constituted by two parts: support activities (firm infrastructure, human resource management, technology development, procurement) and primary activities (inbound logistic, operations, outbound logistic, marketing and sales, service). (Johnson et al. 2011, p.97-99)

Value chain is a set of activities a company performs in order to provide a valuable solution to their customer problem in their market space or industry. The value chain is made up of primary and support activities. Primary activities being research and development, production, marketing and sales and customer service. These are the primary steps that are required to get a product or service to market to solve the customer problems. Some of the secondary steps include company

One of Porter’s main contributions was Porter’s value chain. The value chain is all the activities an organization undertakes to create value for a customer. According to Porter, there are two ways to gain an edge over competitors. A firm must provide comparable but value but perform the activities on the chain at a lower cost, or; Perform services in a unique way

“Competitive Advantage introduces the concept of the value chain, a general Framework for thinking strategically about the activities involved in any business and assessing their relative cost and role in differentiation”. Michael Porter, (1985).

A value chain analysis is a strategic analysis of an organization that uses value creating activities (Dess, McNamara, & Eisner, 2016, p. 76). The value chain analysis describes a company’s activities and relates them to an analysis of the competitive strength of the company

Effective value chain as a competitive advantage can contribute significantly to the prosperity of a firm in the competitive arena, but it can cause dire situations if not operated properly (Guy, 2011). However, there are conflicts among companies as to how stakeholders think they gain competitive advantage. Porter (1996) suggests: A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at lower cost or do both.

Value chain is the ability to take a product and add some value along the way to make it appealing to the customers in such a way that they be willing to buy the product at a certain price. Many companies in today’s business world analyze their value chains to identify the ways which continue to attract their customers. The value chain analysis consist of two parts, primary activities and secondary activities. The first ones support the actual physical process of buying, manufacturing, shipping and selling the product and the secondary activities are actions that support the process, such as procurement, technical support and human resource management.

Value chain is the ability to take a product and add some value along the way to make it to appeal to the customers in such a way that they be willing to buy the product and pay the asking price. Many companies in today’s business world analyze their value chains to identify the ways which continue to attract their customers. The value chain analysis consist of two parts, primary activities and secondary activities. The first ones support the actual physical process of buying, manufacturing, shipping and selling the product and the secondary activities are is actions that support the process, such as procurement, technical support and human resource management.

The basic principle in defining the value chain, according to Michael Porter (Porter, 1985), is that the activities include a variety of disaggregations from the below three perspectives. First, they have different economics, implying that these activities are functioning in different segments of the market. Second, even though the economics differentiation is not that evident, isolated activities should have a potential impact for it. Third, value-adding activities have significant input scale.

Keane (2008) stated to design, manufacture, promote, offer and facilitate its product or services, all organization engages in some activities. All of these activities of an organization are shown through the use of value chain process. The manner in which organization performs its varying activities along with the firm’s value chain mirrors the organization’s background, strategy along with the way in which the organization executes its strategy. Ponte (2008) stated that the analysis of value chain of an organization is used to develop the organization’s competitive strategies along with formulation the connected and interconnectedness between all the organizational activities that formulate value. Francis, Simons, and Bourlakis (2008) stated that value chain analysis is a helpful tool as an organization looks to attain competitive advantage. Furthermore, Rieple and Singh (2010) stated that a value chain is a useful tool in conceptualizing the varying activities

Value chain analysis looks at every step a business goes through, from raw materials to the eventual end-user. The goal is to deliver maximum value for the least possible total cost. It is a systematic approach to examining the development of competitive advantage. The most basic breakdown of primary functions includes inbound logistics, operations, outbound logistics, sales and marketing and service. People should use the other models and frameworks within this software to further differentiate between, and add to, these domains. Product Innovation is one area that is not normally included in the de jure model but is often included in the de facto model. Value Chain Analysis describes the activities that take place in

Value chain is an approach to know how an item or activities create value for consumers. The most of value provides to consumers, the most of competitive advantage an organization build. In this analysis, value chain model has separated into primary and support activities. Primary activities are included in the physical creation of the item and service. On the other hand, support activities give the inputs and infrastructure that enable the primary activities to happen. This value chain model can be refer to below figure 5.

The value chain analysis (shown in appendix) was also generated by Michael Porter. This model is referred to “identifying ways to increase the efficiency of the chain” (Investopedia, n.d.). Furthermore, the overall objective is to produce maximum value with minimum total cost and establish a competitive advantage.

Within the value chain there are two kind of activity, first one is Primary activity as they are directly related to the product or services that a firm produces to the customers and the other one is secondary activity, these are related to the activities that are within the company infrastructure that assist in the company’s primary activity.