Value Chain Analysis
Value Chain Analysis
Value Chain Analysis
Value Activities
Broadly classified into two Primary Activities Support Activities
Primary Activities
Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
Support Activities
Procurement Technology Development Human Resource Management Firm Infrastructure
Value Activities
Identify alternatives
Allocate costs
Cost Reduction
Cost reduction can either be by reducing individual value chain activities or by reconfiguring the value chain Reconfiguring the value chain involves structural changes such as new production processes, new distribution channels etc.
Product Differentiation
A uniqueness can be achieved either by changing the value chain activities or by reconfiguring the value chain.
Advantages
A big advantage is that the value chain is a very flexible strategy tool for looking at your business, your competitors and the respective places in the industry s value system. The value chain can be used to diagnose and create competitive advantages on both cost and differentiation. It can be adapted for any type of business manufacturing, retail or service, big or small.
Disadvantages
Heavily oriented to a manufacturing business can be off-putting for other types of business. Technical expertise needed. Time consuming.
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