Value Chain as Competitive Advantage
Value Chain as Competitive Advantage
Unit 3 Assignment
Christine Washington
GB570 Managing the Value Chain
Jerry Haenisch, Professor
Kaplan University
November 12, 2012
Value Chain as Competitive Advantage
Effective value chain as a competitive advantage can contribute significantly to the prosperity of a firm in the competitive arena, but it can cause dire situations if not operated properly (Guy, 2011). However, there are conflicts among companies as to how stakeholders think they gain competitive advantage. Porter (1996) suggests: A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at lower cost or do both. The arithmetic of superior profitability then follows: delivering greater value allows a company to charge higher average unit prices; greater efficiency results in lower average costs (Walters & Rainbird, 2007, p.25).
Walters & Rainbird (2007) states that an effective value creating strategy takes an organization beyond its own boundaries. An organization has an advantage over other providers of the same goods or a service in a consumer market unless it has a monopoly or is the first to create the market.
Review of Concepts Value chain helps companies assess their competitive advantage through internal cost analysis, internal differentiation analysis, and vertical linkage analysis. Competitive advantage is about discovering what customers want and profitably satisfying those needs and exceeding their expectations. Customer delight is a principle that drives repeat purchasing and customer loyalty. It is about creating a WOW feeling and it can be the difference between success or failure. Two criteria must be met for a company to survive and prosper in the industry: the company must supply what the customers want to buy and they must survive the competition.
Value Chain A value chain describes the full
Unit 3 Assignment
Christine Washington
GB570 Managing the Value Chain
Jerry Haenisch, Professor
Kaplan University
November 12, 2012
Value Chain as Competitive Advantage
Effective value chain as a competitive advantage can contribute significantly to the prosperity of a firm in the competitive arena, but it can cause dire situations if not operated properly (Guy, 2011). However, there are conflicts among companies as to how stakeholders think they gain competitive advantage. Porter (1996) suggests: A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at lower cost or do both. The arithmetic of superior profitability then follows: delivering greater value allows a company to charge higher average unit prices; greater efficiency results in lower average costs (Walters & Rainbird, 2007, p.25).
Walters & Rainbird (2007) states that an effective value creating strategy takes an organization beyond its own boundaries. An organization has an advantage over other providers of the same goods or a service in a consumer market unless it has a monopoly or is the first to create the market.
Review of Concepts Value chain helps companies assess their competitive advantage through internal cost analysis, internal differentiation analysis, and vertical linkage analysis. Competitive advantage is about discovering what customers want and profitably satisfying those needs and exceeding their expectations. Customer delight is a principle that drives repeat purchasing and customer loyalty. It is about creating a WOW feeling and it can be the difference between success or failure. Two criteria must be met for a company to survive and prosper in the industry: the company must supply what the customers want to buy and they must survive the competition.
Value Chain A value chain describes the full
References: Denning, Steve (2011). Delighting Customer. Retrieved from http://www.stevedenning.com/slides/SaltLakeCityDelightingCustomerAug2011.pdf Global Value Chains Initiative (2006). Concepts & Tools. Retrieved from http://www.globalvaluechains.org/concepts.html QuickMBA (2010). Strategic Management: Competitive Advantage. Retrieved from http://www.quickmba.com/strategy/competitive-advantage