...The article focuses on the main aspects of Value chain analysis. The activities entailed in the framework are discussed in detail, with respect to competitive strategies and value to the customer. The article includes tips for students and analysts on how to write a good Value chain analysis for a firm. Moreover, sources of findings information for value chain analysis have been discussed. The limitations of Value Chain analysis as a model have also been discussed. Introduction The value chain approach was developed by Michael Porter in the 1980s in his book “Competitive Advantage: Creating and Sustaining Superior Performance” (Porter, 1985). The concept of value added, in the form of the value chain, can be utilised to develop an organisation’s sustainable competitive advantage in the business arena of the 21st C. All organisations consist of activities that link together to develop the value of the business, and together these activities form the organisation’s value chain. Such activities may include purchasing activities, manufacturing the products, distribution and marketing of the company’s products and activities (Lynch, 2003). The value chain framework has been used as a powerful analysis tool for the strategic planning of an organisation for nearly two decades. The aim of the value chain framework is to maximise value creation while minimising costs (www.wikipedia.org). Main aspects of Value Chain AnalysisValue chain analysis is a powerful tool for managers to identify...
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...Papers on Value chain analysis; Reports on Different Companies The article focuses on the main aspects of Value chain analysis. The activities entailed in the framework are discussed in detail, with respect to competitive strategies and value to the customer. The article includes tips for students and analysts on how to write a good Value chain analysis for a firm. Moreover, sources of findings information for value chain analysis have been discussed. The limitations of Value Chain analysis as a model have also been discussed. Introduction The value chain approach was developed by Michael Porter in the 1980s in his book “Competitive Advantage: Creating and Sustaining Superior Performance” (Porter, 1985). The concept of value added, in the form of the value chain, can be utilised to develop an organisation’s sustainable competitive advantage in the business arena of the 21st C. All organisations consist of activities that link together to develop the value of the business, and together these activities form the organisation’s value chain. Such activities may include purchasing activities, manufacturing the products, distribution and marketing of the company’s products and activities (Lynch, 2003). The value chain framework has been used as a powerful analysis tool for the strategic planning of an organisation for nearly two decades. The aim of the value chain framework is to maximise value creation while minimising costs (www.wikipedia.org). Main aspects of Value Chain Analysis ...
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...FINANCE IN VALUE CHAIN ANALYSIS—A SYNTHESIS PAPER microREPORT #132 OCTOBER 2008 This publication was produced for review by the United States Agency for International Development. It was prepared by DAI. FINANCE IN VALUE CHAIN ANALYSIS—A SYNTHESIS PAPER microREPORT #132 The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. CONTENTS INTRODUCTION ................................................................................. 1 OBJECTIVE ................................................................................ 1 DEFINITION ................................................................................ 1 IMPORTANCE ............................................................................. 1 REPORT STRUCTURE ................................................................. 1 THE VALUE CHAIN ANALYSIS (VCA) FRAMEWORK ..................... 3 ANALYTICAL VCF FRAMEWORK WITH CASE-STUDY ILLUSTRATIONS ................................................................................ 7 UNDERSTANDING THE CURRENT CASH FLOW AND CREDIT STRUCTURE (ANALYTICAL PHASE) ............................................ 7 Intra-firm Finance ......................................................... 8 Finance Services Provision .......................................... 9 Inter-firm Finance (Governance) ................................ 10 UNDERSTANDING...
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...QUESTION 1 HOW DOES A VALUE ADDED APPROACH TO FIRM PERFORMANCE MANAGEMENT DIFFER FROM MORE TRADITIONAL APPROACHES IN ASSESING PERFORMANCE? Performance management is a process by which managers and employees work together to plan, monitor and review an employee’s work objectives and overall contribution to the organization. It is the continuous process of setting objectives, assessing progress and providing on-going coaching and feedback to ensure that employees are meeting their objectives and career goals. Traditionally, private sector businesses usually focus on the financial measures of their bottom line: return-on-investment, market share, and earnings-per-share. Alone this approach does not provide the full perspective of an organization's performance that a manager needs to manage effectively. But by balancing internal and process measures with results and financial measures, managers will have a more complete picture and will know where to make improvements. In contrast, Value Chain Analysis helps you identify the ways in which you create value for your customers, and then helps you think through how you can maximize this value: whether through superb products, great services, or jobs well done. Assessing your business performance should be an ongoing process. It helps you identify areas that need to be improved before they become major issues, as well as giving you the opportunity to consider how to respond. The first step of assessing your business performance is to review...
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...VALUE CHAIN – CRITIQUE/FIRM LEVEL ANALYSIS INDIVIDUAL ASSIGNMENT – UNIVERSITY OF BALLARAT CHINTHAKA ARIYAPALA – ID 30100162 Brief Content Topic Page 1. INTRODUCTION...………………………………………………………………………….. 3 2. VALUE CHAIN FRAMEWORK-CRITIQUE…………………………………………………….. 3 3. MAIN ASPECT OF VALUE CHAIN ANALYSIS…………………………………………………. 3 4. PRIMARY ACTIVITIES…………………………………………………………………………………. 4 5. SUPPORT ACTIVITIES………………………………………………………………….…………. 5 6. LIMITATION OF VALUE CHAIN ANALYSIS………………………………………………………. 7 7. COMPETENCIES……………………………………………………………………………… 8 8. INTERNAL ANALYSIS THROUGH SWOT ANALYSIS……………………………………… 8 9. VALUE CHAIN ANALYSIS……………………………………………………………………….. 9 10. CONCLUTION…………………………………………………………………………………….……. 11 11. REFERENCES……………………………………………………………………………….…………. 13 Introduction The value chain approach was introduced by Michael Porter in the 1980s in his book “Competitive Advantage: Creating and Sustaining Superior Performance” (Porter, 1985). The concept of value added, in the form of the value chain, can be utilized to develop an organization’s sustainable competitive advantage in the business arena of the 21st C. All organizations consist of activities that link together to develop the value of the business, and together these activities form the organization’s value chain. Such activities may include purchasing activities, manufacturing the products, distribution and marketing of the company’s products and activities (Lynch...
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...How to write a Good Value Chain Analysis The ability of a company to understand its own capabilities and the needs of the customers is crucial for a competitive strategy to be successful. The profitability of a firm depends to a large extent on how effectively it manages the various activities in the value chain, such that the price that the customer is willing to pay for the company’s products and services exceeds the relative costs of the value chain activities. It is important to bear in mind that while the value chain analysis may appear as simple in theory, it is quite time-consuming in practice. The logic and validity of the proven technique of value chain analysis has been rigorously tested, therefore, it does not require the user to have the same in-depth knowledge as the originator of the model (Macmillan et al, 2000). The first step in conducting the value chain analysis is to break down the key activities of the company according to the activities entailed in the framework. The next step is to assess the potential for adding value through the means of cost advantage or differentiation. Finally, it is imperative for the analyst to determine strategies that focus on those activities that would enable the company to attain sustainable competitive advantage. It is important for analysts to remember to use the value chain as a simple checklist to analyse each activity in the business with some depth (Pearson, 1999). The value chain should be analysed with the core competence...
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...Value Chain Business 1_ Introduction: The concept and benefits of Value Chain Analysis in preparing business strategies: To survive in today's highly competitive business environment, any organization must achieve, at least temporarily, a competitive advantage. A low cost/price strategy: focuses on providing goods, services at a lower cost than the competition. This strategy requires as well a tight cost-control system, benefiting from economies of scale in production and experience curve effects. Differentiation strategies: The firm ability to offer products and services that are perceived by the customer as being superior and unique relative to those of its competitors like Coca-Cola in the soft drink industry...... A value chain can be described as the key activities engaged in by the organisation or industry.: Value chain analysis may benefit an organisation in a number of ways including: - Value chain framework: complements other recent initiatives like strategic cost management, which refers to the simultaneous focus on reducing costs and strengthening an organisation's strategic position. This commonly involves taking a longer-term view of cost management and decision making - Provides a foundation for strategic alliance decisions. A value chain framework serves as the foundation for considering decisions such as outsourcing of particular parts of the value chain and for considering the formation of strategic alliances with say a distributor. In this way, the...
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...Value chain analysis Value chain From Wikipedia, the free encyclopedia Jump to: navigation, search Popular Visualization The 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.[1] Contents[hide] * 1 Concept * 1.1 Activities * 2 Significance * 3 SCOR * 4 Value Reference Model * 5 References * 6 See also | [edit] Concept A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. 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 much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond. Typically, the described value chain and the documentation of processes, assessment and auditing of adherence to the process routines are at the core of the quality certification of the business...
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...Introduction Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Influential work by Michael Porter suggested that the activities of a business could be grouped under two headings: (1) Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and (2) Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best provided by others ("out sourced"). Linking Value Chain Analysis to Competitive Advantage What activities a business undertakes is directly linked to achieving competitive advantage. For example, a business which wishes to outperform its competitors through differentiating itself through higher quality will have to perform its value chain activities better than the opposition. By contrast, a strategy based on seeking cost leadership will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used. Primary Activities Primary value chain activities include: Primary Activity | Description | Inbound logistics | All those activities concerned with receiving...
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...questions, you answered 10 correctly with a final grade of 100% 10 correct (100%) 0 incorrect ( 0%) 0 unanswered ( 0%) ================================================================ YOUR RESULTS: ================================================================ CORRECT 1: Which one of the following is not helpful in identifying the components of a single-business company's strategy? a. Initiatives to build competitive advantage b. Efforts to expand or narrow geographic coverage c. The company's resource strengths and weaknesses d. The company's key functional strategies Your Answer: The company's resource strengths and weaknesses CORRECT 2: SWOT analysis a. provides the basis for crafting a strategy that capitalizes on the company's strengths, overcomes its weaknesses, aims squarely at capturing the company's best opportunities, and defends against competitive and environmental threats b. provides a quick overview of where on the scale from "alarmingly weak" to "exceptionally strong" the attractiveness of the company's overall business situation ranks. c. helps provide a basis for matching the company's strategy to its internal resource capabilities and its external opportunities and threats. d. helps identify a company's core competencies and competitive capabilities and the seriousness of its resource weaknesses and competitive deficiencies. Your Answer: All of these. CORRECT ...
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...Assignment. 10 marks CLOs S1, S2, S3 1. Analyze and develop internal and external factors by using SWOT and PESTEL Analysis for competitive business strategies. 5 marks 2. Demonstrate the business models and corporate value chain analysis. 5 marks Analyze and develop internal and external factors by using SWOT and PESTEL Analysis for competitive business strategies. 5 marks When planning a project it is important to learn about the internal and external factors that can affect the project. There are some excellent strategic planning methods that you can use analyze all these factors. SWOT analysis and PEST analysis are two of the most frequently used planning methods. Below is a brief introduction to both methods and a comparison of SWOT analysis vs PEST analysis. What is SWOT Analysis ? SWOT when broken down simply means analyzing the: * Strengths – The advantages you have over the competition concerning this project. * Weaknesses – The disadvantages you have internally compared with your competitors. * Opportunities – Current external trends which are waiting to be taken advantage of. * Threats – External movements which may cause a problem and have a negative impact on your business. Sometimes SWOT is referred to as SLOT, where weaknesses are names as liabilities. By working through each of these points it is possible to identify any internal disadvantages or advantages which could benefit or hinder the outcome of a planned project...
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...“Analysis of charcoal value chains general considerations” Steve Sepp – Eco Consulting Group - Germany On behalf of 1 Table of Content Introduction............................................................................................................................................. 2 Importance of promoting the charcoal value chain ................................................................................ 3 Common issues characterizing the charcoal value chain ........................................................................ 3 Analyzing the charcoal value chain ......................................................................................................... 4 Building a roadmap for charcoal value chain upgrading ......................................................................... 7 Conclusions............................................................................................................................................ 10 References ............................................................................................................................................. 11 Introduction Charcoal is a prime source of energy in most African country, as well as a driving force of their economies with estimated annual growth rates of around 3.7 percent [1]. Surprisingly enough, policy makers pay little attention to the ways in which charcoal is produced and sold – e.g. the question as to whether wood used for charcoal burning is harvested...
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...money to start a business to run. Even harder is to develop already existing project. Currently, as practically in every industry there is a huge competition, so must be carry out a market analysis before proceeding to any movement. The analysis must be conducted in a fair manner and give to meaningful results that will take the right decision for the future. Many schools give a lot of methods of market analysis. In addition to the well-known SWAT and PEST analysis, there are many other approaches such as Value Chain Analysis, Porters Five forces, Core Competencies and Stakeholder Mapping that may be useful. This work will present two approaches of strategic analysis process such as Value Chain Management and Potters Five Forces. Those two methods seem to be the most authoritative and covering the largest range methods. The information and conclusions drawn from them give a clear view of the situation in which the company is located and whether the plans for the future have any chance of entry into force and to bring relevant results. The first section presents the method of analysis of the value chain, its advantages and disadvantages, and presented examples of its application in practice, as typified by several companies. In the next part in a similar manner presented the advantages and disadvantages of the Potters five forces, also supported by examples of application. Finally, a brief summary is presented. 2. Value Chain Analysis Value Chain Analysis is one of the...
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...driving the top management of Infosys to seek migration of the company up the value chain? Infosys is a highly respected, India-based information technology (IT) software service provider, established in July 1981. The ramp-up of the company has been particularly spectacular during the last several years, starting from 1995. The initial business model related to labor arbitrage and was based upon differential wage rates for IT professionals in India and the developed countries. The boom of the late 1990s, catalyzed by the Y2K-related problems, resulted in opportunities that the company capitalized upon. Today the company serves clients drawn from global 2000 companies. Based upon its strong ethical and principled approach, execution excellence, relentless quest for quality and customer satisfaction, the company had astounding financial success and became a darling of the stock markets both in India and the United States. Notwithstanding its successful track record, Infosys has over the last several years, proactively been applying itself to a fundamental question of identifying the drivers of success for the next 10 years. Infosys has been deeply concerned about leveraging its current strong position, to evolve into a much stronger company, so as to ensure continued growth and success in the long-term. Main drivers that have contributed to drive the top management of Infosys to move up the value chain are below: * International Competitiveness * Overseas Expansion ...
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...How can firms use models of analysis to understand their business environment? Discuss using appropriate examples. Organizations can use one business analysis model to analyse a section of its business or combine this with other business models to help them in the strategic planning process to gain a competitive advantage in today’s fast changing markets. SWOT and TOWS are acronyms for strengths, weaknesses, opportunities and threats. SWOT (internal-external) provides a checklist of strengths, weaknesses to minimize, uncover opportunities to take advantage of and identify threats to avoid. Whereas the TOWs matrix is (external-internal) matching internal strengths and weaknesses with external opportunities and threats provides a more in depth look at your company’s standing in its current market and gives an understanding of your competitors. External Opportunities (O) External Threats (T) Internal Strengths (S) (SO) Maxi-Maxi Strategy Use strengths to create opportunities (ST) Maxi-Mini Strategy Use strengths to minimise threats Internal Weaknesses (W) (WO) Mini-Maxi Strategy Minimize weaknesses to take advantage of opportunities (WT) Mini-Mini Strategy DEFENSIVE Minimize weaknesses and avoid threats It is important to use verifiable statements such as “Opportunities to save $10M in changing supplier” rather than “Opportunities to save will be good if we change supplier”. If the business is small it is important to know the risks and limitations in using...
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