These consist of activities that do not directly produce goods or services.Infrastructure activities such as administration, human resource management, informationtechnology management, purchasing and procurement, and research and development areincluded in the support area of the model.
These activities are the direct, value creating activities of the firm.Bringing raw materials into an organization, manufacturing a product or service, distributing itas well as marketing, selling and servicing the product are considered primary activities. Themodel can and should be reconfigured to account for activities specific to the industry in whichthe firm competes. For example, in a service industry
such as professional services
inboundlogistics might be replaced with methodology development or client acquisition. Regardless of industry however, the value chain is a powerful framework for analyzing both industry andfirm specific activities.
To portray alternative corporate growth strategies, Igor Ansoff presented a matrix that focusedon the firm's present and potential products and markets (customers). By considering ways togrow via existing products and new products, and in existing markets and new markets, thereare four possible product-market combinations. Ansoff's matrix is shown below:Ansoff's matrix provides four different growth strategies:
- the firm seeks to achieve growth with existing products in theircurrent market segments, aiming to increase its market share.
- the firm seeks growth by targeting its existing products to newmarket segments.
- the firms develops new products targeted to its existing marketsegments.
- the firm grows by diversifying into new businesses by developing newproducts for new markets.