The value chain model of Porter

Miscellaneous LobsterNipples August 8, 2016 0 0
The value chain of Porter called value chain describes the activities required to bring the final product to the customer. The activities are divided into primary and secondary activities. Primary activities include inbound and outbound logistics, operations, marketing, sales and service. Secondary activities include the infrastructure, management, technology and recruitment.

Value chain of Porter

Here, the process, since as a system that is divided into subsystems, whereby each subsystem inputs, has a transformation process, and outputs. Most organizations are active in a hundred, even a thousand activities that transform inputs into outputs. These activities can be subdivided into primary and secondary activities.
The primary activities:
  • Inbound Logistics as the relationship with suppliers and includes all activities relating to the receipt, storage and distribution of inputs;
  • Operations: it refers to all activities that transform inputs into outputs;
  • Outbound Logistics includes the activities that collect the output, storage and distribution;
  • Marketing and Sales inform buyers about the products and services and get them to buy;
  • Service ensures that after the purchase the product or service continues to work.

The secondary or supporting activities:
  • Procurement refers to the acquisition of inputs for the enterprise;
  • Human Resource Management includes the activities which build on the recruitment, training, development and if necessary, dismissal of staff;
  • Technological development is about the equipment, hardware, software, procedures and technical knowledge needed to turn inputs into outputs;
  • Infrastructure needs of the firm and includes departments such as accounting, finance and planning.

It is important for the activities that add value to identify the technology. Thus, one can see where in the value chain, the process should be adjusted to get a better result. These results can be expressed in a decrease in costs. The analysis of the value-added activities also indicates where the process is even more to distinguish. Through a differentiation strategy, the company is trying to be unique in some dimensions. You select here are some attributes that are experienced by many buyers as important. Next, positions itself in a unique way to fill these needs.

Explanation value chain

The value chain of Porter gives insight into the activities of an organization. All these activities come in every organization they can only be filled otherwise. The composition and content of these activities provides a competitive advantage or not. Organizations must make a good composition and interpretation of secondaries and primary activities, this will ensure that they perform better. There also exists something like a critical succesfactoor, with this chain, it is possible to detect the critical succesfactoor. The critical succesfactoor is actually the best control of a company. One example, a company may have an innovative production process giving the organization an advantage tenopzichte competition. All these activities come in every organization they can only be filled otherwise.
The value chain according to Porter