Essay about Value Chain Analysis - 3406 Words

Value Chain Analysis The article focuses on the main aspects of Value chain analysis. The activities entailed in the framework are discussed in detail, with respect to competitive strategies and value to the customer. The article includes tips for students and analysts on how to write a good Value chain analysis for a firm. Moreover, sources of findings information for value chain analysis have been discussed. The limitations of Value Chain analysis as a model have also been discussed. Introduction The value chain approach was developed by Michael Porter in the 1980s in his book â€Å"Competitive Advantage: Creating and Sustaining Superior Performance† (Porter, 1985). The concept of value added, in the form of the value chain, can be†¦show more content†¦An efficient procurement department should be able to obtain the highest quality goods at the lowest prices. †¢ Human Resource Management This is a function concerned with recruiting, training,, motivating and rewarding the workforce of the company. Human resources are increasingly becoming an important way of attaining sustainable competitive advantage. †¢ Technology Development This is an area that is concerned with technological innovation, training and knowledge that is crucial for most companies today in order to survive. †¢ Firm Infrastructure This includes planning and control systems, such as finance, accounting, and corporate strategy etc. (Lynch, 2003). Figure 1 The Value Chain Source: Porter (1985) Porter used the word ‘margin’ for the difference between the total value and the cost of performing the value activities (Figure 1). Here, value is referred to as the price that the customer is willing to pay for a certain offering (Macmillan et al, 2000). Other scholars have used the word ‘added value’ instead of margin in order to describe the same (Lynch, 2003). The analysis entails a thorough examination of how each part might contribute towards added value in the company and how this may differ from the competition. In a study of SaudiShow MoreRelatedValue Chain Analysis1651 Words   |  7 Pagesorganization should adopt the various application of information technology. This will put the organization at the forefront in terms of innovation as well as give the organization a competitive advantage (Hitt amp; Robert, 2011, p.10). Value chain analysis is a model that was developed by Michael Porter to help an organization develop a strategy for its organization. Michael porter suggested that organization activities can be grouped into two major categories which include the following; primaryRead MoreValue Chain Analysis And Analysis1589 Words   |  7 Pagesdiscuss and explore the value chain analysis and the internal analysis in the strategic management. The focus of this report is to study the value chain analysis in detail along with the advantages and disadvantage of the value chain analysis. Also, the internal analysis is also discussed along with its pros and cons and the SWOT analysis of Next Plc. This report also discusses the way in which organizational resources are mixed to develop company’s abilities, Value Chain Analysis Keane (2008) statedRead MoreAn analysis of porters value chain1188 Words   |  5 Pagesfirms can gain a competitive advantage, it is useful to model the firm as a chain of value creating activities. For this purpose, Porter identified a range of interrelated generic activities common to a wide range of firms. The resulting model is known as the value chain. According to Porter (1985), Competitive Advantage arises out of the way firms organise and arrange discrete activities. Through using the Value Chain, the activities performed by a firm competing in a particular industry canRead MoreValue Chain Analysis For Costco1000 Words   |  4 PagesThe purpose of this paper is to do a value chain analysis of Costco, identify their resources and capabilities, to conduct a SWOT analysis to identify the opportunities in which they are lagging and to form a strategy to move forward using the recourses and capabilities in the direction of utilizing those opportunities. Value Chain Analysis for Costco Conducting a value chain analysis provides a snapshot for identifying a firm’s relative competitive performance, core competencies, and for focusingRead MoreSwot Analysis : Value Chain1514 Words   |  7 PagesIntroduction Value chain analysis has proven to be a useful tool for knowing how an organization can create the greatest value for its customers. Michael Porter (1985) in his book competitive advantage states that â€Å"understanding how a business creates value are essential elements for developing a competitive advantage.† [1]. According to porter (1985) value chain is â€Å"the process view of an organization, the idea of seeing an organization as a system, made up of subsystems each with inputs, transformationRead MoreCompany Analysis : Value Chain Analysis Essay1291 Words   |  6 PagesValue chain represents the internal activities a firm engages in when transforming inputs into outputs. Value chain analysis is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation. Value chain analysis is also a strategy tool used to analyze internal firm activities. Its goal is to recognize, which activities are the most valuable (i.e. are the source of cost or differentiationRead MoreValue Chain Analysis of Aggreko2672 Words   |  11 PagesUniversity of Stirling Pre-Masters Skills for Business Environment Value chain analysis of Aggreko Name: Rita Date: 2011 Tutor: David Dick Value chain analysis of Aggreko 1. Introduction Currently, along with the increasingly development of globalization, every walks of life has to confront with the fierce competition. Even electric power market is no exception as well. Furthermore, more and more companies have not satisfied with the domestic market, they have focused onRead MorePorters Value Chain Analysis1879 Words   |  8 PagesThe value chain shows the internal steps a company or organization takes to transform inputs into outputs (Jurevicius, 2013). As the products pass through each stage or activity, value is added until they ultimately are ready to reach the consumer. Value chain analysis a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation (Jurevicius, 2013). The use of value chain analysisRead MoreMcdonalds Value Chain Analysis5751 Words   |  24 Pagesservice restaurant industry in terms of market share and brand value. Com mitted in quality, service, cleanliness, and value, McDonald’s must deliver its product to consumers with consistency and efficiency. This report will explore how McDonald’s corporation maintains its operational excellence through support from integration of sophisticated technologies. It suggests that to be able to apply technology in organization, value chain process must be defined and by then, information technology canRead MoreUps Value Chain Analysis864 Words   |  4 PagesValue Chain Model and Competitive Force Model BUSA 310: Dr. Chris Lee Carl Field Justin Kelly Jacob Augustine Monique Becker Value Chain Model [pic] Value Chain Model of United Postal Service United Postal Service (UPS) and every business has a Value Chain Model in order to be able to make sure that you have the best values for your internal and external customers. We have two activities, which are the Support and Primary. The UPS Support activities involve the Firm Infrastructure