Preview

Business Models Strategy Use Of Porter S 1985 Value Chain Framework

Powerful Essays
Open Document
Open Document
2383 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Business Models Strategy Use Of Porter S 1985 Value Chain Framework
0

More Next Blog»

Create Blog Sign In

Business Models & Strategy
The Business Models & Strategy blog is an online resource center for entrepreneurs, small business owners, business and marketing professionals. Our goal is to provide relevant information, educate and engage with all the professional that are interested in business and strategy. Home

Business Toolkits

T h ur s day, June 30, 2011

Labels

Use of Porter’s (1985) Value Chain Framework

Checklists (2)

Use of Porter’s (1985) Value Chain Framework
Porter’s model of value chain is one of the best known and widely applied models of a company’s value­creation processes (Sanchez and Heene, 2004). According to
Porter:
“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”
(Porter, 1985:33)

competitive strategy (8)

Porter (1985), Besanko et al. (1996), and McGuffog & Wadsley (1999) identify that a company’s profitability is a function not only of industry conditions, but also of the amount of value it creates relative to its competitors. A firm can achieve competitive advantage if it posses ‘capabilities’ that allow it to create not only positive value but as well additional total value than its competitors (Porter, 1985;
Hooley et al, 2004). By understanding why a company can create value and whether it can continue to it in the future is a necessary first step in diagnosing a firm’s potential for achieving a competitive advantage in the marketplace (Hitt et al, 2007; Spanos and Lioukas, 2001). Therefore, a firm must understand how its products serves customer needs better than potential substitutes; the technology of production, distribution and sales; and the business’s costs (Porter, 1985).

Strategy Quotes (1)

According



Links: Tweet this Synergy Consulting Solutions View stats Business Templates 4u  (NEW) Appointment gadget >> There was an error in this gadget There was an error in this gadget Simple template. Template images by mariusFM77. Powered by Blogger.

You May Also Find These Documents Helpful

  • Good Essays

    Comm 210 Review

    • 3705 Words
    • 15 Pages

    Major Claim: Successful firms are the ones that first capitalize on economies of scale and scope, create management structures and invest in research and development which allows them to stay ahead of the competition.…

    • 3705 Words
    • 15 Pages
    Good Essays
  • Good Essays

    Since the 1980s, many scholars have put forward the theory of the value chain. Professor Michael Porter of the Harvard Business School in 1985, pointed in the "Competitive Advantage": Every enterprise is a collection of various activities in the design, production, sales, send, and auxiliary products process, all of these activities can be indicated as a value chain. The value of enterprise created through a series of activities, these activities can be divided into two types of basic activities and auxiliary activities. The basic activities include internal logistics, production, external logistics, marketing and services; auxiliary activities including procurement technology development, human resource management and corporate infrastructure. These interrelated production and business activities constitute a dynamic process of creating value, that is value chain. In "Competitive advantage", Potter also break through the boundaries of the enterprise, and extended to the perspective of economic exchanges between different enterprises, the concept of a value system, which is the basis of the concept of global value chains. Porter's value chain theory reveals that the competition between enterprises is not just competition of one part, but the competition of the entire value chain, while the overall competitiveness of the entire value chain to determine the competitiveness of enterprises.…

    • 544 Words
    • 3 Pages
    Good Essays
  • Best Essays

    Porter, M.E (2004) Competitive Advantage – Creating and Sustaining Superior Advantage. The Free Press New York USA.…

    • 3917 Words
    • 16 Pages
    Best Essays
  • Better Essays

    One of Porter’s main contributions was Porter’s value chain. The value chain is all the activities an organization undertakes to create value for a customer. According to Porter, there are two ways to gain an edge over competitors. A firm must provide comparable but value but perform the activities on the chain at a lower cost, or; Perform services in a unique way that would create higher value and dictates premium price.…

    • 2286 Words
    • 10 Pages
    Better Essays
  • Best Essays

    Astrazeneca-report

    • 4092 Words
    • 17 Pages

    The value chain was developed by Michael Porter and can be a powerful tool when analysing a company’s organisation and performance. It allows key areas to be highlighted as it offers a…

    • 4092 Words
    • 17 Pages
    Best Essays
  • Powerful Essays

    Can the company create value across the range of its business? (Ability to exploit synergies, minimisation of transaction costs,…

    • 633 Words
    • 3 Pages
    Powerful Essays
  • Powerful Essays

    According to Lu & Hung (2010), the competiveness of a firm is dependent upon the competiveness of the value chain in which it belongs. The evaluation of the critical concepts that a value chain creates is vital to the competitive edge of the firm. A firm that effectively creates their value chain will have an gain on a firm that does not comprehend the significance of a value chain. An organization must appreciate the importance of their customers and recognize that they are a vital part of their value chain. This can be done by:…

    • 1614 Words
    • 7 Pages
    Powerful Essays
  • Best Essays

    The first section presents the method of analysis of the value chain, its advantages and disadvantages, and presented examples of its application in practice, as typified by several companies. In the next part in a similar manner presented the advantages and disadvantages of the Potters five forces, also supported by examples of application. Finally, a brief summary is presented.…

    • 3847 Words
    • 16 Pages
    Best Essays
  • Good Essays

    “A company achieves a competitive advantage whenever it has some type of edge over rivals in attracting buyers and coping with competitive forces.” (Hartman, DeJardins, MacDonald,2014. p. 4).…

    • 241 Words
    • 1 Page
    Good Essays
  • Powerful Essays

    Ghemawat J. Pankaj and Jan W. Rivkin, Creating Competitive Advantage, Harvard Business Review, Harvard Business School press, 9-798-062, February 25, 2006.…

    • 1972 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    The porter’s value chain is a model that helps to analyze specific activities through which firms can create value and competitive advantage.…

    • 894 Words
    • 4 Pages
    Powerful Essays
  • Powerful Essays

    Building Competitive Advantage Through Market Based Management Practices In 21st Century Management practices, firms and corporations are constantly seeking the leg-up on the competition to increase profits and long-term value creation. In an increasingly global environment, competition remains stiff if not more competitive than ever before. Representing indirect forces on competitive advantage for companies, globalization and national and international business/trade laws have an increasing impact on competitive measures that firms may take.…

    • 4260 Words
    • 18 Pages
    Powerful Essays
  • Better Essays

    The Value Chain analysis was created by Porter and published in the book Competitive Advantage, in 1985. In this book, Porter explains the different strategies that a company can adopt in order to gain advantage against its competitors, which can be trough cost reduction or differentiation. The Value Chain is than a tool used to analyse the sources of competitive advantage of an organization, by disaggregating the firm into strategically relevant activities, each one with its own inputs and outputs. The competitive advantage is obtained when a firm can perform these activities either cheaper or better than its competitors.…

    • 1154 Words
    • 5 Pages
    Better Essays
  • Best Essays

    10. Porter, M. (1985) Competitive Advantage: creating and sustaining superior performance. US: Free Press. .…

    • 2684 Words
    • 11 Pages
    Best Essays
  • Better Essays

    Value Chain Analysis

    • 2679 Words
    • 8 Pages

    Value chain analysis is a method to review all the activities in an organization that contribute to maximizing competitive advantage and customer delight while identifying non value added waste and costs in the value chain process (Walter & Rainbrid, 2007). The purpose of this paper is to analyze Amazon’s value chain. Amazon’s mission statement reads as “our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” This paper will provide facts to analysis if this mission has been accomplished (“About amazon,”).…

    • 2679 Words
    • 8 Pages
    Better Essays

Related Topics