Porter 's Value Chain Of The Petroleum Sector

1338 WordsNov 6, 20166 Pages
Porter’s Value Chain in the Petroleum Sector A value chain is a full range of activities, including design, production, marketing and distribution that businesses go through to bring a product or service from conception to delivery. The value chain analysis was popularized by Michael Porter in 1985. Porter investigated the sequence of activities that are required to bring a product or service from concept through different stages of production, distribution, and to the final customer. Porter wrote “Competitive advantage cannot be understood by looking at a frim as a whole, it stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation.” (Michael Porter Competitive Advantage: Creating and Sustaining Superior Performance) Porter suggest, that it is the activities within an organization that add value to the services and products that a company produces. Any company that wants to improve its competitiveness can achieve its goals using the value chain. The value chain can be a very useful tool when trying to understand the factors that impact the long-term profitability of a business and when developing a successful strategic plan the for business. The value chain can be thought of as a set of activities, services, and products that lead to the success of a product or service that reaches
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