Global Value Chain : Lincoln University Essay

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)

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.

The value chain is one of the critical elements of a company’s strategy in today’s competitive world, because company’s profit depends on how the successful and efficient it runs its operations and how the end product appeals to the customers at a price that covers all the expenses of the company.

According to Michael Porter’s concept about value chain, “activities within the business companies add value to the product and service that the business organization or companies produces”. The idea of the value chain is based on the process view of organization, the idea of seeing a manufacturing firm as a system, made up of subsystems each with inputs transformation process and output. Inputs, transformation processes, and outputs involve the acquisition and consumption of resources – money, labour, materials, equipment, buildings, land, administration and

The value chain is one of the critical elements of a company’s strategy in today’s competitive world, because company’s profit depends on how the successful and efficient it runs its operations and how the end product appeals to the customers at a price that covers all the expenses of the company.

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

The value chain is a temporary competitive advantage for Zara. The major reason why it is not a sustainable advantage is that it is not rare. Barney stated that it is not a sustainable resource if a large number of other firms can also gain benefit from the same resource. It is clearly that Zara’s competition also get their global value chain. Therefore, no firm could get a competitive advantage on the common strategy. Nevertheless the value chain is difficult for new entrants to imitate cause it is costly in capital and time. Further, there is not another way

lyas, R., Mohammed, Banwet, D. K., & Shankar, R. (2007). Value chain relationship: A strategy

Abstract: Nowadays economy globalization and information integration are the main trends of development. Manufacturing activities become dispersed across geographical and organizational boundaries. However, UK manufacturing performance has been weaker than it used to be in recent years. It is essential for UK manufacturers to broaden their perception of manufacturing beyond production and deliver high value to countries, stakeholders and themselves. This essay mainly discusses about the problem emerges in UK manufacturing and provides two approaches with several examples for UK manufacturers in order to increase their financial, strategic and social value. It can also provide reasonable guidance for UK manufacturers in creating and capturing value in global business networks effectively through outcome driven supply chain.

The “value system” is also referred to as the “industry value chain”. The term value system underlines the fact that activities are not necessarily organised in a linear fashion, but viewing the activities that make up the final product as a chain is also useful and underlines the linkage between the concept of the “value chain” and the “value system”.

A value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market. The concept comes from business management and was first described and popularized by Michael Porter (Porter, 2013)

The world of today, goods and services are rarely produced and exported to a consumer from one location. Production involves a complex process where inputs and supporting activities are sourced globally for effective and efficient delivery, taking into consideration the cost of production and labor. These complex arrangements constitute what is known as global value chains (GVCs), and it describes the series of actions undertaken to deliver a product or service from an idea to start with into its final form as it cuts across geographic space and international boundaries.

Foreword Authors Acknowledgments International value chains: Current trends and future needs, as exemplified by the automotive industry 1. Internationalizationofthevaluechainintheautomotiveindustry 2. Configurationandcoordinationascrucialdimensionsinshapinginternational  valuechains 3. Bestpracticesandoptionsformanagingtheinternationalvaluechain Glocal value creation in the Volkswagen Group: Moving toward greater decentralization of production and development 1. TheVolkswagenGroup’snewglobalstrategy 2.

Another point of view is to take a look at the value chain analysis which helps to identify the most valuable activities of a firm. Wheelen, Hunger, Hoffman, & Bamford (2014). In the case of Electrolux, it would appear that they provide considerable value to the appliance market however; the struggle (as previously mentioned) has been breaking into emerging markets in this case, China. With considerable middle class growth in China, the standard of living is rising exponentially; therefore, a large number of new households will be able to invest in appliances and other household products. The second point in the value chain analysis begs the question of rarity or more succinctly, can resources be acquired by one or limited organizations. Resources which are rare and valuable can provide a temporary competitive advantage. Conversely, when more than a few companies posses the same resource or utilize the same capability, this can lead to competitive parity. Wheelen et al (2014) Therefore, one must ask several questions in order to find rare resources. For example; how many companies own a resource or can perform capability in the same way as Electrolux? And, can a resource be easily bought in the market by rival companies? In the case of Electrolux the rareness component is nonexistent because other companies e.g., LG Electronics, Whirlpool and Haier already have a stronghold in the global market with similar products. Furthermore, China has been known to