Porters value chain - 1795 Words

Michael Porter published the Value Chain Analysis in 1985 as a response to criticism that his Five Forces framework lacked an implementation methodology that bridged the gap between internal capabilities and opportunities in the competitive landscape. This framework focused on industry attractiveness as a determinant of the profit potential of all companies within that particular industry. However, significant differences in performance exist between companies operating within the same industry that can be explained either by the company s participation in a successful strategic group or by a firm s specific competitive advantages. Value Chain Analysis helped identify a firm s core competencies and distinguish those activities that†¦show more content†¦Technology development activities can bring product differentiation by introducing improvements to the development process. Finally cost-effective procurement activities that look for the most reliable suppliers with the best quality of goods can significantly reduce costs and create more value. By subdividing an organisation into its key processes or functions, Porter was able to link classical accounting to strategic capabilities by using value as a core concept, i.e. the ways a firm can best position itself against its competitors given its relative cost structure, how the composition of the value chain allows the firm to compete on price, or how this composition allows the firm to differentiate its products to specific customer segments. Achieving Competitive Advantage with Value Chain The value chain helps an organization in understanding where value is created at each of its activities and in linking those value-adding activities with the business strategy and customer needs. This set of activities which represents a unique and integrated value-creating sequence is hard for competitors to emulate and thereby sets up and maintains a long lasting competitive advantage for the organization. For example, The Warehouse Group Limited, the largest store retailer in New Zealand, hasShow MoreRelatedAn 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 By Michael Porter2187 Words   |  9 PagesValue Chain Analysis Value Chain is a strategic tool to measure the importance of the customer’s perceived value in value chain analysis. By enabling companies to determine the strategic advantages and disadvantages of their activities and value-creating processes in the marketplace, value chain analysis assumes critical importance in assessing competitive advantage. The dissertation explores the different elements of the value chain of computer hardware and behemoth Dell and seeks toRead MoreThe Value Chain By Michael E. Porter And Popularized Essay809 Words   |  4 PagesThe Term ‘value chain’ was coined by Michael E. Porter and popularized in his business management book, Competitive advantage: creating and sustaining superior performance. According to Michael E. Porter, the value chain includes the activities within and around a company that creates a product or service. Porter’s value chain constitutes a set of activities that are performed to design, product and market, deliver and support its products. Porter distinguished between; †¢ Primary activities: inboundRead MoreAnalysis Of Michael Porter s Value Chain Essay1740 Words   |  7 PagesDuring 1985, Michael Porter, one of the most important American economists, introduced one of his most famous theories: â€Å"The Value Chain†. Through this model is possible to describe an organization like a set of processes. Precisely nine processes divided in five primary activities and four support activities that help the business to gain its competitive advantage. The primary activities are composed by â€Å"Inbound Logistics†, â€Å"Operations†, â€Å"Outbound Logistics†, â€Å"Marketing Sales† and â€Å"Service†, whileRead MoreMichael Porter s Value Chain Analysis1813 Words   |  8 Pagesprogress, gaining an advantage is an essential key element to the companies success. To distinguish these viable advantages, Michael Porter created value chain analysis, which views a firm as a series of business processes that each add value to the product or service (Baltzan). The value chain analysis is a valuable source for regulating the greatest possible value for consumers. This topic will be further discussed with two major leading companies, Amazon and EBay. The increase in ecommerce willRead MoreAnalyzing Porter s Five Forces And Value Chain Analysis Essay1809 Words   |  8 Pagesmaintain their Vision â€Å"to create a better everyday life for many people,† customer trust and love IKEA vision with their low-price. In this report, will be analyzing Porter’s five forces and value chain analysis. The two tools will enable readers to have a clear understanding on IKEA form internal value to external value, which included not limited to primary activity, secondary activity, internal power, external power and threat of substitution. Bygone through these points above, readers can identify andRead MorePorter Value Chain Analysis882 Words   |  4 PagesPORTER S VALUE CHAIN ANALYSIS The porter’s value chain is a model that helps to analyze specific activities through which firms can create value and competitive advantage. There are two activities in value chain which are: Primary activity – directly concern with creating and delivering a product. Support activities – not directly involved in production, may increase effectiveness or efficiency. PRIMARY ACTIVITIES | DESCRIPTION | Inbound Logistic | * Concerned with receivingRead MoreValue Chain Analysis By Michael Porter Essay2186 Words   |  9 PagesWhat is a Value Chain? A value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market. The concept comes from business management and was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage Value chain analysis is a strategic analytical and decision-support tool that highlights the bases where businesses can create value for their customers. The frameworkRead MorePorter s Value Chain Of The Petroleum Sector1338 Words   |  6 PagesPorter’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 wroteRead MorePorters Five Forces Value Chain1396 Words   |  6 PagesDay #2 Porter’s Strategic Models: The Five forces and the Value Chain CIS Department Professor Duane Truex III The Information Systems Strategy Triangle Business Strategy Organizational Design Strategy ICT/Information Strategy Professor Truex E-CommercePrinciples 1 HOW CAN INFORMATION RESOURCES BE USED STRATEGICALLY? Professor Truex E-CommercePrinciples Aligning IS/ICT strategy (Infrastructures) with business strategy †¢ Using multiple approaches to evaluating