Please enable JavaScript.
Coggle requires JavaScript to display documents.
3.4 - Coggle Diagram
3.4
The Value Chain
Value refers to the sum a buyer is willing to pay for what a supplier delivers in a competitive context
-
Value Chain Analysis helps the organisation understand in detail each aspect of the value chain and how more value may be added and the aspects of the value-added process
-
Value Chain Analysis enables the organisation to understand the interrelations and interdependent of their activities such as:
-
-
-
-
"Every firm is a collection of activities that are performed to [ultimately] deliver and support its product [or service]"
Porter, 1985, p.36 (Competitive Advantage Book)
"The relevant level for constructing a value chain id a firm's activities in a particular industry (Business unit)"
Porter, 1985, p.36 (Competitive Advantage Book)
-
-
Implications
Value chain analysis enable the organisation to establish how effectively each activity is being performed including the use of qualitative and quantitative data collection regularly.
To judge their relative performance, organisations must seek to benchmark an activity or group of activities against a rival from the same industry known for high performance.
-
If value is added during each step, the overall value will be enhanced
If the organization is able to clearly map out the various value chain activities and appreciates the best way to optimize the linkages, this may result in a difficult to imitate sustainable competitive advantage
Competitive advantage is derived from both, specific activities and the ways these activities relate to each other