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 The Value Chain
framework of Michael Porter
is a model that helps to analyze specific activities through which firms
can create value and competitive advantage.
Inbound Logistics
Includes
receiving, storing, inventory control, transportation scheduling.
Operations
Includes
machining, packaging, assembly, equipment maintenance, testing and all
other value-creating activities that transform the inputs into the final
product.
Outbound Logistics
The activities
required to get the finished product to the customers: warehousing, order
fulfillment, transportation, distribution management.
Value Chain model of Michael Porter:
Marketing and Sales
The activities
associated with getting buyers to purchase the product including channel
selection, advertising, promotion, selling, pricing, retail management,
etc.
Service
The activities
that maintain and enhance the product's value, including customer support,
repair services, installation, training, spare parts management,
upgrading, etc.
Procurement
Procurement of raw
materials, servicing, spare parts, buildings, machines, etc.
Technology Development
Includes
technology development to support the value chain activities, such as
Research and Development, Process automation, design, redesign.
Value Chain model of Michael Porter:
Human Resource Management
The activities
associated with recruiting, development (education), retention and
compensation of employees and managers.
Firm Infrastructure
Includes general
management, planning management, legal, finance, accounting, public
affairs, quality management, etc.
From a Value Based
Management point of view, the Value Chain Framework helps to build a relative competitive advantage, together with Porter's
Competitive Advantage
thinking. The Value Chain Framework can be seen as one of two dimensions
in maximizing corporate value creation. The other value creation dimension
is the Market/Industry Attractiveness for which another model from
Porter is often used: the Competitive Forces
model.
See also:
Porter Competitive Forces
| Porter Competitive Advantage
| Porter Diamond Model |
Parenting Advantage
| Prahalad
|
BCG Matrix |
Greiner |
Kay |
Mintzberg |
Outsourcing |
Just-in-time |
Bricks and Clicks |
Value Stream Mapping |
Delta Model
More management models
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