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VALUE CHAIN ANALYSIS (VCA)

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on 20 September 2013

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Transcript of VALUE CHAIN ANALYSIS (VCA)

VALUE CHAIN ANALYSIS (VCA)
Michael Porter: The Value Chain
Evaluating VCA
How to do VCA
VCA: What is it?
Analysis of activities in the VC to identify competitive strength for a business
Step 1
Simple VC of a Cake
Value Chain (VC) : Organizational activities ranging from raw materials, to the final product for the consumer.
WHY VCA IS DONE
Optimal allocation of resources
Value-creating activities: Competitive advantage
Potential sources of economic advantage
OBJECTIVES OF VCA
1. Secure cost advantages
2. Create differentiated products for customers
Profit
Margin
Inbound
Logistics
Operations
Outbound
Logistics
Marketing
& Sales
Services
Firm Infrastructure Human Capital Management
Procurement Systems and Technology


Support Activities
Primary Activities
Company-level:
• Resources and capabilities: sustainability
• Encourages delivery of value to customer
• Exemplifies existing SWOT analysis



Industry-level:
• Understanding relative competitive position
• Pace at which technology and customer demands change

• Data required is expensive

• Time-consuming analysis

• Not compatible with internal accounting data of a firm
1. Define Strategic Business Units
2. Value-Creating Activities
3. Internal Cost Analysis
4. Internal Differentiation Value Analysis
5. Industry Profit Pool
6. Vertical Linkage Analysis
7. Iterate
1. GATHERING INGREDIENTS
2. WHISKING
3. BAKING
4. ICING
5. PACKAGING
6. DISTRIBUTION
7. SALES
VCA
Full transcript