Essay on Laudon Mis 6ce Ch03

The term value chain refers to the idea that all of the functions of a company, including production, marketing, product development, service,

21. Adhocracy is a structure where values, motivation, willingness to participate, and mutual respect, allow a high level of coordination without the need for formal control

Under Mike Porter’s Value Chain analysis every organization has primary activities and support activities. Primary activities are inbound logistics, operations, outbound logistics, marketing and sales, and customer service. Support activities are infrastructure, human resource management, technological development, and procurement. For a conglomerate like Disney creating value is done by leveraging all the outputs of its various segments to benefit the others.

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.

The model is based on the research findings of Michael E. Porter, a Harvard Business School Professor. The model was recently updated in the late 1990’s and early 2000’s to depict what it is today. As you can see from the diagram, the dominating factor that the forces are based upon is the rivalry faced again existing competitors. When competition is high amongst competitors, the forces that revolve around the competition tend to intensify.

According to the theory of Jim Riley, Value chain analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Influential work by Michael Porter suggested that the activities of a business couold be grouped under two headings: Primary and Support activities.

This firm will employ value chain activities that help increase perceived value or decrease costs using value drivers related to product features, customer service, and complements according to Rothaermel (2017). Examples of value chain activities for differentiated products include the following:

Identifying the primary and secondary components of a value chain helps balance the activities that a company performs internally to create value for the buyers. A value chain is made up of primary and secondary activities. Primary activities relate directly to the physical creation, sale,maintenance, and support of a product or service. Primary activities consist of supply chain management, operations, distribution, sales and marketing, and service, as seen in figure 4.1, (Gamble, Peteraf, Thompson, 78). Secondary activities support the primary activities. Secondary activities consist of product research and development, technology, system development, human resource management, and general administration. Chipotle uses a value chain to lead their company to success while providing quality ingredients and service to their customers.

The value chain is separated into primary activities, directly concerned with creation and delivery of goods. Then support activities, indirect undertakings concerned with activities focused on increasing productivity and effectiveness.

ii) Include all primary and support activities that pertain to the organization in the value chain analysis. The activities included will depend on the organization.

ii) Include all primary and support activities that pertain to the organization in the value chain analysis. The activities included will depend on the organization.

The Value chain portrays all the internal activities that a firm undergoes to convert inputs into outputs. Consequently, value chain analysis is when a firm recognizes the primary and support activities that contribute in adding value to the final product, then analyze these activities in accordance to the firms strategy of either reducing costs or increasing differentiation (Jurevicius, 2013).

Porter viewed rivalry among the prevailing players as a result of assertion towards their competitive position in the marketplace. The competition among the existing companies is based upon

Before we consider the value chain model it would be useful to know that a value chain is none other than a supply chain. On the most basic level, value chains are a series of focused activities that advance a product or service toward an objective. It can be the actions of a single contributor in a workflow, but more typically, it refers to the orchestration of activities where many interrelated contributors provide inputs on a work in process (WIP) at specific times and locations. Likewise, activities can be quite precise and relatively limited, such as a sub-process, or the value chain can be an all-encompassing collective of every activity that a complex system may perform. Author and Harvard Business School Professor, utilized the

1) An adhocracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.