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Analyzing the Activities of a Firm |
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Value Chain |
Summary of the VC Framework by Porter. Abstract |
Michael Porter |
Inbound Logistics Includes
receiving, storing, inventory control, transportation scheduling. 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. The activities
that maintain and enhance the product's value, including customer support,
repair services, installation, training, spare parts management,
upgrading, etc. Procurement of raw
materials, servicing, spare parts, buildings, machines, etc. 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.
T I P : Here you can discuss and learn a lot more about value chain analysis and design. Compare with Porter's Value Chain: 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 |
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