Chapter 10:

Learning Outcomes
1. Discuss the different elements of value chain.
2. Discuss value chain models.
Porter’s Value Chain Diagram
 Primary Activities
Refer to the organizational processes that
directly add value to a firm’s products and
services.
Primary are composed of the following
activities:
1. Inbound Logistics-this pertains to the logistics
that allows the firm to get the needed
supplies and raw materials.
2. Operations – this pertains to the actual
production or processes that a firm performs
in order to directly transform inputs into
marketable outputs.
3. Outbound Logistics – this pertains to the
systems and channels that the firm uses to
bring its products and services to its customers.

4. Marketing and Sales – this pertains to the

activities that communicate, inform and educate
the consumers about the value of the firm’s
products and services.
 Secondary Activities or Support
Activities
Refer to the organizational activities that, while
not directly adding value to the products and
services, add value to the management and
coordination of primary processes.
 Secondary Activities
1. Firm Infrastructure – this refers to the
organizational structure, operating policies,
compensation and penalties systems,
hierarchy and accountability, and
management styles.
2. Human Resource Management – this
pertains to the activities involved in hiring,
training, developing, and motivating
personnel for the organizations.

3. Technology – this refers to the tools that the

firm uses to produce its products and services
including equipment, software, technical
knowledge, procedures, and protocols.
4. Procurement – this pertains to the ability of
the firm to find the best possible suppliers, with
the best quality supplies and raw materials, for
its operations.
 Value Analysis along the Value Chain
In order to understand better value analysis
along the value chain, please watch this:
https://www.youtube.com/watch?v=OaJFJ4vxt2M

Thank You for watching and

listening!