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Value Chain Template: Firm Infrastructure
Value Chain Template: Firm Infrastructure
firm infrastructure
procurement
operations service
primary activities
source: Michael Porter, competitive advantage
provenmodels
outbound logistics
inbound logistics
outbound logistics
inbound logistics
outbound logistics
inbound logistics
2.
Have different economics; Have a high potential impact of differentiation; Represent a significant or growing proportion of costs.
cost analysis: managers examine the costs associated with (the most important) activities to understand why and how their cost base differs from competitors. Defining relevant cost drivers helps to estimate competitors positions and to assess the own organisations flexibility; value analysis: managers analyse how each activity generates customer willingness to pay. Customer willingness often varies per customer segment; strategic decision making: consider changes in activities so that costs are lowered or customer willingness is increased. Identify linkages, relationships between value activities, within the chain. The more complex the linkage the higher chance it will provide a competitive advantage. The competitors profiles need to be taken into account when repositioning oneself.
3. 4.
make a clear distinction between annual recurring cost and one time investments;
keep track of all assumptions that underline the allocation of costs over the activity groups; use sensitivity analysis to validate the assumptions underlying the value chain analysis in order to assess which assumptions really matter; value chain analysis allows for the inclusions of multiple drivers per activity. only include drivers that vary across competitors; do not focus on differences between total cost levels, but on costs per activity. Activities provide competitive advantage; research should focus on customers willingness to pay for an activity as part of a products profile instead of only a customers desire; reduce the list of customer needs to a manageable number.