The value chain of an organization consists of all the stages right from procurement of the raw materials till the creation and sale of the final product. From obtaining raw material to the marketing and sales there are several activities that add value to the product. Organizations must focus on value chain management to obtain full performance. Overlooking issues down the value chain can be disastrous. A value chain analysis helps at analysing the performance of the several stages or phases down the value chain and solve any issues that may be hindering performance. There are two forms of activities in the value chain including the primary and the support activities. The primary activities are the main activities including conversion of raw materials to their marketing and sales. The main primary activities are:
- Inbound logistics - Operations - Outbound logistics - Marketing and sales - Support The support activities that support the primary activities are: - Human resources - Firm infrastructure - Technology - procurement Value chain can be a source of competitive advantage given that it is managed properly. The focus of the companies must be on managing each and every support activity properly so as to produce better than expected results. Check an example of value chain analysis.
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AuthorAbhijeet Pratap Archives
October 2021
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