Porter's Value Chain
Porter’s Value Chain Model is a framework that helps analyze a company’s internal processes and activities to identify areas where value can be added and costs can be reduced. As a tool for business strategy, it helps us understand the sources of value creation in a company and how that company can improve its competitiveness.
The model separates primary and support activities that a company performs in order to deliver a product or service to its customers.
The model separates primary and support activities that a company performs in order to deliver a product or service to its customers.
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What the download contains
- The UNITE Navigator , offering an overview of all UNITE models
- Porter's Value Chain
- The UNITE Approach to Value Stream Mapping to deepen your analysis
Helps to structure business activities in order to facilitate the assessment of each of them reg. their cost and value
Introduces teh categorisation into Primary Activities and Support Activities
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Why we use it
Understanding the diverse ways a business expends its limited resources can be a considerable challenge. Porter’s Value Chain Model attempts to make this process easier by dividing everything a business does into two baskets: primary activities and secondary activities.
According to the model, primary activities include all the work and investment necessary for the business to bring value to its customers.
Primary activities include:
1. Inbound Logistics
2. Operations
3. Outbound Logistics
4. Marketing and Sales
5. Service
The secondary activities in Porter’s Value Chain Model are:
1. Procurement
2. Technology Development
3. Human Resource Management
4. Infrastructure
According to the model, primary activities include all the work and investment necessary for the business to bring value to its customers.
Primary activities include:
1. Inbound Logistics
2. Operations
3. Outbound Logistics
4. Marketing and Sales
5. Service
The secondary activities in Porter’s Value Chain Model are:
1. Procurement
2. Technology Development
3. Human Resource Management
4. Infrastructure
How It Works
The Value Chain Model unpacks all of your business activities following these steps:
1. Identify the primary and support activities in your value chain (e.g., procurement, human resource management).
2. Assess the cost and value of each activity: Evaluate the cost of each activity and the value it adds to the product or service.
1. Identify the primary and support activities in your value chain (e.g., procurement, human resource management).
2. Assess the cost and value of each activity: Evaluate the cost of each activity and the value it adds to the product or service.
3. Identify areas for improvement, based on the cost and value analysis.
4. Develop an action plan for implementing changes to the value chain.
5. Implement and monitor.
4. Develop an action plan for implementing changes to the value chain.
5. Implement and monitor.
What is the goal of the model?
The Value Chain Model ‘s goal is to help you understand all the activities that occupy your business’s resources and identify areas of potential savings, development, and innovation.
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