Search results
Results from the WOW.Com Content Network
A value chain is a progression of activities that a business or firm performs in order to deliver goods and services of value to an end customer.The concept comes from the field of business management and was first described by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.
Strategy consultants occasionally use Porter's five forces framework when making a qualitative evaluation of a firm's strategic position. However, for most consultants, the framework is only a starting point and value chain analysis or another type of analysis may be used in conjunction with this model. [13]
Porter introduced the concept of value chain analysis in his 1985 book, Competitive Advantage: Creating and Sustaining Superior Performance. The value chain comprises each of the activities, from design through distribution, that a company performs to produce a product; these activities are viewed as the “basic units of competitive advantage".
Porter wrote in 1980 that strategy targets either cost leadership, differentiation, or focus. [1] These are known as Porter's three generic strategies and can be applied to any size or form of business. Porter claimed that a company must only choose one of the three or risk that the business would waste precious resources.
Porter revised the strategy paradigm again in 1985, writing that superior performance of the processes and activities performed by organizations as part of their value chain is the foundation of competitive advantage, thereby outlining a process view of strategy. [34]
If the value proposition is effective, that is, if the value proposition offers clients better and greater value, it can produce a competitive advantage in either the product or service. [3] Competitive strategy is defined as the long term plan of a particular company in order to gain competitive advantage over its competitors in the industry.
Image Source: Getty Images. While the Japan example offers an interesting glimpse into how the AI value chain can be deployed at scale, the broader story is one of interdependence and synergy ...
Analysing the firm's activities as a linked chain is a tried and tested way of revealing value creation opportunities. The business economist Michael Porter of Harvard Business School pioneered a value chain approach: "the value chain disaggregates the firm into its strategically relevant activities in order to understand the costs and existing potential sources of differentiation". [3]