Methods & techniques
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The document explains Value Chain Analysis (VCA) as a framework for firms to identify and refine their primary and support activities, aiming to reduce costs or increase differentiation. It outlines key primary activities such as inbound logistics, operations, outbound logistics, marketing and sales, and services, as well as secondary activities like procurement, human resources management, technological development, and infrastructure. The ultimate goal of VCA is to enhance competitive advantage by optimizing valuable activities within the firm.
Methods & techniques
- 1. Methods and Techniques used for organization Appraisal VALUE CHAIN ANALYSIS
- 2. Introduction • “ Value Chain Analysis (VCA) is a process where a firm identifies its primary and support activities that add to its final product and then analysis to reduce costs or increase differentiation.” • “ Value Chain represents the internal activities a firm engages in when transforming inputs into outputs.”
- 3. • “ Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing , delivering and supporting its product. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation.” __ Michael Porter
- 4. Value Chain Analysis • Value Chain Analysis (VCA) is a strategy tool used to analyze internal firm activities. • Its goal is to recognise, which activity are most valuable ( i.e. are the source of cost or differentiation advantage ) to the firm and which ones could be improved to provide competitive advantage.
- 5. Value Chain Analysis • The firm that competes through DIFFERENTIATION ADVANTAGE will try to perform its activities better than competitors would do. • If it competes through COST ADVANTAGE, it will try to perform internal activities at lower costs than competitors would be.
- 9. •Inbound Logistics: arranging the inbound movement of materials , parts , and/for finish inventory from suppliers to manufacturing or assembly plants , warehouses , or retail stores. •Operations: concerned with managing the process that converts inputs into outputs. •Outbound Logistics: is the process related to the storage and movement of the final product and the related information flows from the end of the production line to the end users.
- 10. • Marketing and Sales : selling a product or services and processes for creating , communicating , delivering and exchanging offerings that have for customers , clients , partner , and society at large. • Services : includes all the activities required to keep the product/services working effectively for the buyer after it is sold and delivered.
- 16. • Procurement : the acquisition of goods, services or works from an outside external source. • Human Resources Management: consists of all activities involved in recruiting , hiring , developing , compensating , and dismissing or laying off personnel.
- 17. • Technological Development: pertains to the equipment , hardware , software , procedures and technical knowledge brought to bear in the firm’s transformation of inputs into outputs. • Infrastructure: consists of activities such as accounting, legal, finance, control, public relation, quality assurance, and general (strategic) management.