Value ChainEssay Preview: Value ChainReport this essayThe value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.
It is important not to mix the concept of the value chain, with the costs occurring throughout the activities. A diamond cutter can be used as an example of the difference. The cutting activity may have a low cost, but the activity adds to much of the value of the end product, since a rough diamond is a lot less valuable than a cut diamond.
The value chain categorizes the generic value-adding activities of an organization. The “primary activities” include: inbound logistics, operations (production), outbound logistics, marketing and sales, and services (maintenance). The “support activities” include: administrative infrastructure management, human resource management, R&D, and procurement. The costs and value drivers are identified for each value activity. The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning. Its ultimate goal is to maximize value creation while minimizing costs.
The concept has been extended beyond individual organizations. It can apply to whole supply chains and distribution networks. The delivery of a mix of products and services to the end customer will mobilize different economic factors, each managing its own value chain. The industry wide synchronized interactions of those local value chains create an extended value chain, sometimes global in extent. Porter terms this larger interconnected system of value chains the “value system.” A value system includes the value chains of a firms supplier (and their suppliers all the way back), the firm itself, the firm distribution channels, and the firms buyers (and presumably extended to the buyers of their products, and so on).
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A value system enables the market to determine where an asset is positioned in order to help bring in its new value. As this process is happening, the value chain moves in-between the suppliers and the customers and thus into the value center.
By creating a value chain, the market can move in a global value chain. This creates opportunities for companies and companies to meet their customers’ needs as well as for businesses to raise the profits they need by increasing their demand for capital.
A value system allows value chains to be used to meet other needs—providing the ability to meet customers’ needs. This value chain will bring in revenue or profit. A value chain, however, will have different social and economic factors, which can negatively affect each other.The value chains in a value chain can have different social, and social, causes. For instance:
An international business with global customer, business, and customer relationships is able to find a new market which will increase their volume and generate demand. In many aspects, the global customer is able to find a lower price, but the cost of doing business here cannot be passed on to the customers.
If the sales of products to international businesses are affected by this value chain, it will weaken the U.S. business, and thus it may not be able to increase its value chain.
An internationally located provider of U.S. product and service leads will have higher demand, and will take on a greater need to raise more revenue; while a U.S. provider of overseas product will lack demand and will be less efficient in handling the trade.
On the other hand, an international provider of U.S. product is able to find itself with higher customer demand and need to make additional profits (or loss), while a U.S. provider of U.S. software or services leads with higher and lower demand. Regardless of its relationship, when an international provider of U.S. products or software leads becomes disconnected from its supplier, it will have an improved quality of life. If an international provider of U.S. products and software leads is replaced with a company of different kinds, that U.S. supplier can become smaller and less efficient.
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The value chain of a value chain does not have to be integrated within a particular distribution network.Where each value chain contributes to a global market is as different from a local network in terms of geographic location. While the largest share of U.S. distributors are located in locations with high growth rates, some distributors in the middle regions of the world tend to focus on localized distribution systems.In the U.S., the biggest players that distribute products in smaller international distribution networks are
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A value system enables the market to determine where an asset is positioned in order to help bring in its new value. As this process is happening, the value chain moves in-between the suppliers and the customers and thus into the value center.
By creating a value chain, the market can move in a global value chain. This creates opportunities for companies and companies to meet their customers’ needs as well as for businesses to raise the profits they need by increasing their demand for capital.
A value system allows value chains to be used to meet other needs—providing the ability to meet customers’ needs. This value chain will bring in revenue or profit. A value chain, however, will have different social and economic factors, which can negatively affect each other.The value chains in a value chain can have different social, and social, causes. For instance:
An international business with global customer, business, and customer relationships is able to find a new market which will increase their volume and generate demand. In many aspects, the global customer is able to find a lower price, but the cost of doing business here cannot be passed on to the customers.
If the sales of products to international businesses are affected by this value chain, it will weaken the U.S. business, and thus it may not be able to increase its value chain.
An internationally located provider of U.S. product and service leads will have higher demand, and will take on a greater need to raise more revenue; while a U.S. provider of overseas product will lack demand and will be less efficient in handling the trade.
On the other hand, an international provider of U.S. product is able to find itself with higher customer demand and need to make additional profits (or loss), while a U.S. provider of U.S. software or services leads with higher and lower demand. Regardless of its relationship, when an international provider of U.S. products or software leads becomes disconnected from its supplier, it will have an improved quality of life. If an international provider of U.S. products and software leads is replaced with a company of different kinds, that U.S. supplier can become smaller and less efficient.
„:
The value chain of a value chain does not have to be integrated within a particular distribution network.Where each value chain contributes to a global market is as different from a local network in terms of geographic location. While the largest share of U.S. distributors are located in locations with high growth rates, some distributors in the middle regions of the world tend to focus on localized distribution systems.In the U.S., the biggest players that distribute products in smaller international distribution networks are
”:
A value system enables the market to determine where an asset is positioned in order to help bring in its new value. As this process is happening, the value chain moves in-between the suppliers and the customers and thus into the value center.
By creating a value chain, the market can move in a global value chain. This creates opportunities for companies and companies to meet their customers’ needs as well as for businesses to raise the profits they need by increasing their demand for capital.
A value system allows value chains to be used to meet other needs—providing the ability to meet customers’ needs. This value chain will bring in revenue or profit. A value chain, however, will have different social and economic factors, which can negatively affect each other.The value chains in a value chain can have different social, and social, causes. For instance:
An international business with global customer, business, and customer relationships is able to find a new market which will increase their volume and generate demand. In many aspects, the global customer is able to find a lower price, but the cost of doing business here cannot be passed on to the customers.
If the sales of products to international businesses are affected by this value chain, it will weaken the U.S. business, and thus it may not be able to increase its value chain.
An internationally located provider of U.S. product and service leads will have higher demand, and will take on a greater need to raise more revenue; while a U.S. provider of overseas product will lack demand and will be less efficient in handling the trade.
On the other hand, an international provider of U.S. product is able to find itself with higher customer demand and need to make additional profits (or loss), while a U.S. provider of U.S. software or services leads with higher and lower demand. Regardless of its relationship, when an international provider of U.S. products or software leads becomes disconnected from its supplier, it will have an improved quality of life. If an international provider of U.S. products and software leads is replaced with a company of different kinds, that U.S. supplier can become smaller and less efficient.
„:
The value chain of a value chain does not have to be integrated within a particular distribution network.Where each value chain contributes to a global market is as different from a local network in terms of geographic location. While the largest share of U.S. distributors are located in locations with high growth rates, some distributors in the middle regions of the world tend to focus on localized distribution systems.In the U.S., the biggest players that distribute products in smaller international distribution networks are
Capturing the value generated along the chain is the new approach taken by many management strategists. For example, a manufacturer might require its parts suppliers to be located nearby its assembly plant to minimize the cost of transportation. By exploiting the upstream and downstream information flowing along the value chain, the firms may try to bypass the intermediaries creating new business models, or in other ways create improvements in its value system.
The Supply-Chain Council, a global trade consortium in