Value Chain : Competitive Advantage

1300 Words6 Pages
Value Chain as Competitive Advantage If a firm sustain profits that exceed the industry average, said firm is said to have a competitive advantage. The goal of any given business strategy is to achieve a competitive advantage. Moreover, the goal of a successful business strategy is a sustainable competitive advantage. The question is how does a firm create that competitive advantage? According to Michael Porter, to achieve a competitive advantage, a firm must perform one or more value creating activities in a way that creates more overall value than competitors (1985). The purpose of this paper is to examine how the value chain creates competitive advantages. It will review the concepts of the value chain, the inter-relationship of these concepts as well as provide examples of companies that were successful and unsuccessful in the integration of these concepts. Review of Concepts Competitive advantage means more than merely surpassing what competitors can do. It also means discovering what a firm’s customers want and then adequately satisfy and exceed their expectations. The competitiveness of a firm is generated by how successful it is in achieving that which is most valuable, most important and most efficient. In other words, firms want to identify its most valuable customers, its most important products/markets and wants to perform the activities that are most efficient (Poppelaars, 2013). To achieve these goals, firms should utilize the value chain as a tool of process
Open Document