Porter's value chain
- 1. Porter’s Value Chain by: Nailul Khaira
- 2. Hello! I am Nailul Khaira I am a student at Uin Suska Riau Information System You can find me at: [email protected] Or in Instagram : @rara.khaira 2
- 4. Value Chain It evaluates which value each particular activity adds to the organizations products or services. This idea was built upon the insight that an organization is more than a random compilation of machinery, equipment, people and money. Only if these things are arranged into systems and systematic activates it will become possible to produce something for which customers are willing to pay a price. Porter argues that the ability to perform particular activities and to manage the linkages between these activities is a source of competitive advantage. (Michael Porter in his book "Competitive Advantage: Creating and Sustaining superior Performance" (1985). 4
- 6. Primary Activities Inbound Logistics: Here goods are received from a company's suppliers. They are stored until they are needed on the production/assembly line. Goods are moved around the organization. Operations:This is where goods are manufactured or assembled. Individual operations could include room service in an hotel, packing of books/videos/games by an online retailer, or the final tune for a new car's engine. Outbound Logistics:The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer. Marketing and Sales: In true customer orientated fashion, at this stage the organization prepares the offering to meet the needs of targeted customers. This area focuses strongly upon marketing communications and the promotions mix. Service: This includes all areas of service such as installation, after- sales service, complaints handling, training and so on. 6
- 7. Support Activities Procurement :This function is responsible for all purchasing of goods, services and materials. The aim is to secure the lowest possible price for purchases of the highest possible quality. Technology Development :Technology is an important source of competitive advantage. Companies need to innovate to reduce costs and to protect and sustain competitive advantage. This could include production technology, Internet marketing activities, lean manufacturing, Customer Relationship Management (CRM), and many other technological developments. Human Resource Management (HRM) :Employees are an expensive and vital resource. An organization would manage recruitment and selection, training and development, and rewards and remuneration. Firm Infrastructure :This activity includes and is driven by corporate or strategic planning. It includes the Management Information System (MIS), and other mechanisms for planning and control such as the accounting department. 7
- 8. Margin Margin’ implies that organizations realize a profit margin that depends on their ability to manage the linkages between all activities in the value chain. organization is able to deliver a product / service for which the customer is willing to pay more than the sum of the costs of all activities in the value chain. 8
- 9. Thanks! Any questions? You can find me at: [email protected] [email protected] 9