Value chain analysis is a strategic management tool introduced by Michael Porter in his 1985 book Competitive Advantage that breaks a company's activities into a sequence of primary and support activities in order to identify where value is added and where competitive advantage can be created or lost. Primary activities in Porter's model include inbound logistics, operations, outbound logistics, marketing and sales, and service, while support activities include procurement, technology development, human resource management, and firm infrastructure. Managers use the analysis to examine each activity's costs and contribution to the value delivered to customers, in order to find opportunities to reduce costs or increase differentiation relative to competitors.
Facts
Core ClaimA value chain is a sequence of activities that an organization performs to design, produce, market, deliver, and support goods or services for customers. 1 Classification
Topic (Functional Area) Connections
Associated With
Porter developed Value Chain Analysis as a complementary tool for locating the sources of competitive advantage the Five Forces model maps.
Source Wikipedia, Porter's Five Forces
Value Chain Analysis is used to identify the activities through which a firm pursues one of Porter's generic strategies.
Source Wikipedia, Porter's Generic Strategies
Developed By
Source Wikipedia, Value Chain Analysis
Sources
1. Wikipedia, Value Chain Analysis
WikipediaWikipedia, Value chain lead section
The concept was introduced by Michael Porter in Competitive Advantage: Creating and Sustaining Superior Performance (1985) as a framework for analyzing how firms create value and achieve competitive advantage through coordinated business processes.
Introduction, functional area topic classification
A value chain is a sequence of activities that an organization performs to design, produce, market, deliver, and support goods or services for customers.
- Developed By: Michael Porter
View the Source Wikipedia, Porter's Five Forces
Wikipedia, Porter's Generic Strategies
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