Value Chain Analysis By Harvard Business School

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Value chain analysis is presented by Harvard Business School professor Michael Porter. It is a tool to determine the companies’ competitive advantages. A company has many resources, capabilities and competitive advantages, If the enterprise as a whole to consider, it is difficult to recognize these competitive advantages, we have to break down business activities, and considering these individual activities themselves and their relevance to determine the company 's competitive advantage. Value chain analysis method depending on business as a series of input, conversion, and output sequence set. Each activity may generate added value behavior for the final product, thereby enhancing the competitive position of the enterprise. The key to…show more content…
Step of the value chain analysis is as follows: (1) Decompose the entire value chain into operation, costs, revenues and assets associated with the strategy, and assign them into the "valuable work"; (2) Determine the operations that cause the changes of value, according to the operations, analyze the cause of the cost and the differences of these operations; (3) Analyze the relationship of each node in the value chain between enterprises, to determine the correlation between core business operations with customers and suppliers; (4) Through the results, regroup or improve the value chain in order to better control the cost drivers, generate sustainable competitive advantages. So that each node in the value chain of enterprises can gain an advantage in the fierce market competition. Caltex, a petroleum company began in 1936, according to the 2011 Caltex Australia annual report, the company went through a difficult period because of extreme weather events and other complicated factors. However, Caltex had taken several measures to make sure the customers can be supplied continuously. For example, an extra capacity was built in Port Hedland to meet the demand of customers of western areas. Besides, a project to enhance the performance of pipeline delivering jet fuel
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