Primary activities inbound logistics operations outbound logistics marketing and sales service 3. It integrates customeroriented and costbased ideas meffert 1994, 51f. As you might have guessed, the value chain is a set of activities that will lead to the creation of value. He identified several key steps common among all value. Jan 25, 2020 the porters value chain concept says that there is a chain of events which occur in a company right from the procurement of raw materials to the delivery of goods as well as the post sales service. Porter has dedicated much of his career to studying competitive advantage. Porters value chain analysis by michael porter marketing tutor. Value chain analysis using porters model slideshare. Porters value chain is well suited for this massmarket, costdriven approach, where customers remain at the end of the value chain. In 1985 porter proposed the value chain as a tool to identify and to analyze the origins of competitive advantages.
Porter s value chain activities diagram in powerpoint 2010 if you are preparing a marketing plan or business strategy for your organization and need the popular porter s value chain diagram in your powerpoint slides, then here we will show you how to design a simple but nice enoguh value chain diagram using shapes. Porters value chain what is the value chain of porter. Value chain analysis and competitive advantage article pdf available in journal of general management 271. Remember that the point of doing a value chain analysis is to help you identify your businesss 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 of procter and gamble case study value chain analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. This chain is made up of 9 steps and the process can be changed in any of the nine steps to add further value to the final product. Harvard business school professor, michael porter, introduced a simple value chain model in his book.
One of his bestknown concepts is the value chain, which is used to deliver a product or service to the market and has three key objectives. Though, the methodology was originally developed to attain a seamless flow for the overall functioning of an organization, it has gradually made its way in almost every industry. The term value chain was used by michael porter in his book competitive advantage. This presentation introduces a systematic method to conduct a value chain analysis. The value chain analysis describes the activities the organi. With this tool, you can see the full picture of what your company does to provide the products or services to the public. Porters value chain born in 1947 harvard professor wrote book, competitive advantage. Value chain analysis of procter and gamble case study.
Competitive advantages differences among competitor value chains are a key source of competitive advantage porter, 1985 firm infrastructure used to increase efficiency and to cut costs computerized coffee roasters wifi in stores mobile. Value chain analysis merupakan strategi yang digunakan untuk mengalisis kegiatan internal perusahaan. Here are the basic steps to consider when making a company value chain analysis. The value chain provides a rigorous way to understand the sources of buyer value that will command a premium price, and why one product or service substitutes for another, says porter. Feb, 2018 back in 1985, michael porter, a harvard business school professor, introduced a basic value chain model in his book competitive advantage. The value chain analysis is an excellent tool for strategic management as it breaks down the activities of your company, so you can better identify their value, importance, and efficiency. The supportive activities are formed by four key factors like technology aspects, and the primary activities has a series of subcategories such as branding, engagements, storing and so on. Porter suggested that activities within an organisation add value to the service and products that the organisation produces, and all these activities should be run at optimum level if the organisation is to gain any real competitive advantage. The value chain analysis template below shows the very basic model of the porter s value chain analysis process. Porters value chain activities diagram in powerpoint 2010. Dec 16, 2016 value chain analysis using porters model 1.
Determine the primary and support activities of your business. May 06, 2020 michael porter introduced value chain models in his book competitive advantage. The value chain the term value chain was used by michael porter. Porters value chain analysis is a tool that can be used to determine exactly how your company goes about the task of creating value.
In his book, porter first time introduced value creation concept. The concept of value chain analysis has been polarized by michael porter his most popular five forces model. Value added selling price less the cost of purchased raw materials has sometimes been used as the focal point for cost analysis because it was viewed as the area in which a firm can control costs. A value chain represents the industrial process starts from raw materialsinputs to end productsservices. The figure below illustrates the essence of value chain analysis. Everything you need to know about value chain analysis.
Value chain analysis smi strategic management insight. Introduction it was introduced by michael porter in 1985, in criticism of his 5 force model. Michael porter in his groundbreaking book, competitive advantage, remains. Michael porter introduced the value chain analysis concept in his 1985 book the competitive advantage.
The value chain from competitive advantage, by michael porter. Sep 30, 2018 the value chain analysis sometimes refers to porters value chain analysis model is a wellknown business management tool developed by michael porter in 1985 in his alltime influential book competitive advantage. The flow of seed to farmers and grain or tubers to the market occurs along chains. The value chain the term value chain was used by michael porter in his book competitive adva n tage. If the technique is to be applied, refer to michael porters great book on competitive aedvanctage. For example, in a book publishers marketing and sales activity, direct sub activities include. According to michael porter, value chain consists all.
Aug 12, 2015 value chain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the business. Coca cola value chain analysis researchmethodology. Porter introduced the generic value chain model in 1985. Value chain analysis is mentioned extensively in the first half of the book competitive advantage in 1985 by michael porter. Learn about primary and support activities and subactivities, and how they affect. The person most accredited for mounting and articulating the value chain thought is michael porter in his 1985 book, competitive advantage. Its goal is to recognize, which activities are the most valuable i. Back in 1985, michael porter, a harvard business school professor, introduced a basic value chain model in his book competitive advantage. Due to restrictions, this post only introduces the major concepts of value chain analysis. Creating and sustaining superior performance porter, 1985, as a tool of analyzing the firms internal environment and resource base.
The concept was developed by michael porter with his book competitive advantage 1985 where the idea of value chain is based on the processe view of organisations, the idea of seeing a manufacturing or service organisation as system, made up of subsystems each with inputs, transformation process and outputs which involve the acquisition. Michael porters value chain analysis learnmarketing. It is a means of implementing competitive strategies. Porter saw the idea as a way of observing how businesses view the process of what they do when competing in the marketplace to deliver products or services. Value chain analysis is used by business analysts, project managers, and administrators to evaluate which activities provide the greatest opportunities to. A free powerpoint ppt presentation displayed as a flash slide show on id. Value chain for a copier manufacturer adapted from porter, 1985 cpp insight although the value chain has been in the public domain for over 20 years, its not often used expressly as part of the strategy development process.
Value chain analysis is a systematic method for disaggregating a firm or industry into its major discrete activities to understand sources of competitive advantage. T he value chain analysis describes the activ ities the organ ization performs and links them to the organizations competitive pos ition. The value chain also known as porters value chain analysis is a business management concept that was developed by michael porter. Porters value chain analysis by michael porter toolshero.
Value chain analysis is used to identify an organizations major business processes and how they interact. 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. Michael porter discussed this in his influential 1985 book competitive advantage, in. Guidelines for value chain analysis jon hellin and madelon meijer 4 2. Report contains a full version of xiaomi value chain analysis. Porters value chain analysis free management books.
It is sometimes known as porter s value chain as first described by michael porter in his 1985 bestseller competitive advantage. An analysis of the value chain rather than value added is the appropriate way to examine competitive advantage. Apr 25, 20 value chain analysis is a strategy tool used to analyze internal firm activities. The following is an example of the value chain for copier manufacturer. He has termed it as a useful tool for analyzing a business unit and assessing competencies of the unit. Michael porter discusses value chain analysis from multiple angles in his book. Dec 08, 20 the value chain also known as porters value chain analysis is a business management concept that was developed by michael porter. Jan 22, 2011 value chain analysis porters value chain the concept of value chain was propagated by michael porter in the 1980s in his book competitive advantage. Value chain analysis can be used to identify opportunities to gain cost advantageimprove performance and increase competitive differentiation. Porters value chain analysis starbucks by yuta lolap on prezi.
Value chain analysis value chain analysis adalah proses di mana sebuah perusahaan mengidentifikasi kegiatan utama dan bantuan yang menambah nilai produk, kemudian menganalisisnya untuk mengurangi biaya atau meningkatkan diferensiasi. The first step in mapping the market is to delineate the value chain. It allows us to look at current challenges in a value chain, as well as the opportunities for improving the efficiency of the value chain and the benefits for everyone involved. Wiley encyclopedia of management 3rd edition vol 12 strategic management, edition. Since the mid1980s, michael porters value chain analysis i.
Value chain analysis is a strategy tool used to analyze internal firm activities. However, there are a few essential components to be aware of. Porter s value chain born in 1947 harvard professor wrote book, competitive advantage 2. The straightforward guide to value chain analysis hubspot blog. In his book competitive advantage 1985, michael porter explains value chain analysis. The value chain approach considers the role of existing chain actors, supporting actors, and the policy environment. Creating good value for customers is complex, and it involves a chain of activities linked to one another. Discover strategy expert michael porters model to help you to identify and maximize value in your organization.
Porters value chain model powerpoint template sketchbubble. These elements make up the value chain analysis and each includes the required actions to take when developing a product or service starting from the raw material to the finished product. Hax and majluf 1996, meffert 1994, meffert 2000, hayes et. It is a set of activities that an organization carries out to create value for its customers. Porters value chain presentation 1 linkedin slideshare.
He offers viewing a firm as a sequential procedure of valuecreating actions as a means of a influential conceptual tool for thoughtful the building slabs of competitive advantage. Creating and sustaining superior performance value chain analysis can be complementary to other types of business. Value chain analysis a changed perspective results of operations vs. Value chain analysis school of information systems. Porters value chain activities diagram in powerpoint 2010 if you are preparing a marketing plan or business strategy for your organization and need the popular porters value chain diagram in your powerpoint slides, then here we will show you how to design a simple but nice enoguh value chain diagram using shapes.
Water is the main ingredient for all products manufactured by coca cola company and the company occasionally faces. The value chain approach is part of many current textbooks on marketing e. Ppt value analysis powerpoint presentation free to. Value chain is a remarkable approach to attain a specific task in the most feasible way by following a certain set of operations.