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Contents
Introduction.................................................................................................................................................2
Discussion....................................................................................................................................................2
Analysis....................................................................................................................................................4
Communication.......................................................................................................................................6
Conclusion...................................................................................................................................................7
Bibliography................................................................................................................................................8
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Introduction
Organization ultimately derives profit from customer satisfaction by
delivering the best products to them. From identifying the exact need of the
customer, to design a product according to the needs, involves many steps.
From calculating the total cost of the products including Raw material, R&D,
shipment, to assessing the need of deployment of human resource, and from
assessing the optimum quantity to be produced to the overall market,
economy and trends going on in society, all these process and many others
are happening around in the organization. (Bajpai, P. and Potters, C. 2021)
All these activities are carried out by people working in different
departments. How much Collaboration and Coordination between the
people of these different departments is important can now be easy to
understand. Suppose at the initial level the Marketing department which was
surveying the market for indenting needs of the customer, was not able to
convey exactly what the customer wanted as product of their choice, at the
end of the what will suffer?- The sales and the profit of course. (Barratt, M.
2004)

The working of all these different departments and their collaboration is

termed as a value chain process as each department is working in their own
best ways but in order to bring value in the final/finished product a certain
level of coordination and collaboration is required. We will see how different
theoretical models can be used to derive and enhance this required
collaboration and what contemporary research in the field is going on. How
can we improve the coordination between these departments? (Donovan, J.
et al. 2015)
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Discussion
Porter Value chain model is the key to understanding the linkages between
different process of an organization working for a creating value in their
products and or services. Porter has in his theory identified two groups of
activities carried out by organizations to reach toward their final proposition.
They are termed as Primary and Support activities. The primary activities
include inbound operations, operations, outbound logistics, marketing and
sales, service. While the secondary activities include; procurement and
purchasing, human resource management, technological development and
company infrastructure.

It is important to understand that these activities also seems to be

independent building blocks for any organization but in essence they are
required to work as a one unit each one aware of the working of the other as
ultimately each function has an effect on the other which eventually effects
the competitive advantage of the firm. The practical example of which we
often see in in organization where collaboration and linkage between vital
department lacks is the gap between supply and demands, overstocking or
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short stocking. What could have been going in background of such drastic
events is easy to understand, imagine the over promotion of a product,
which was based on ineffectively communicated sales forecasts, and the
inability of the human resource management teams to deploy sufficient man
power.

Research indicates the importance of the value chain, the different functions
of the value chain and the collaboration and coordination between the value
chain functions. (Koc, T. and Bozdag, E. 2017) But there is very little
material available on how to enhance the linkages between these functions,
how organization can improve communication between different functions.
This report aims to consolidate all the material in one report on the issue
where a reader will find all the necessary steps and strategies that can be
used on how to improve the linkages and what steps are required for an
enhanced collaboration and effective communication between different
functions of the organization to derive greater competitive advantage. To
better cope with the efficiency of value chain process we are listing some
suggestions made available by research.

Analysis
In order to expect a better out come from what the company does it needs
to thoroughly understand how they are doing the work. For this purpose an
in-depth analysis of the value chain process is required. Analysis can be
done in the following major ways.

Using porter model

The porter model provides a very detailed frame work for organization value
chain process. A detailed analysis of the porter functions can lead a company
to decide better. For each primary activities of the model an identification of
sub activities must conducted. There are three different types of sub-
activities.
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a. Direct activities; They create values by themselves,

for example a feedback call
b. Indirect activities; They ad in the direct activities for
example making record of the information obtained
c. Quality assurance; These activities insure that the
direct and indirect activities meets the established
standards

Similarly identification of sub-activities in the support activities must also be

done accordingly. It should work same like the above that is what direct,
indirect and Quality assurance activities are there in the Human Resource
Management, Technology Development and Procurement support activities.
The same process should be then done for the Infrastructure of the
company.

The final stage which would be almost a result of the above activity is to find
links between the above identified activities. For example looking for a link
between decreases in sale of specific product with CRM record.

Using Pestle Model

Value chain and competitive advantage can also be considered from the intra
organizational perspective. From the horizontal linkage view of the value
chain the PESTLE analysis tool becomes even more important. The firm must
analyze the Political, Economic, Social, Technological, Legal and
Environmental factors. (Reding, M. (2021) as these factors are always a
catalyst of change. The Covid-19 Pandemic and its effect on the medicine
and medical equipment industry is an example to consider. The pandemic
left an unprecedented effect on world from social, to legal and political to
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economic level. Although every industry was effected, but in the context of
value chain, consider a firm producing surgical masks and medicines.

PESTLE analysis can be used in every function of the organization such as;
Workforce planning, Marketing planning, Product development,
Organizational change, People strategies, reports and projects

Using ANSOFF Model

Although the ANSOFF model covers a very selective area, that is the type of
Market and the type of Product, but as we look for value creation in the
product, the broader analysis of Porter Model gives us many information,
which is then supported by a general out environment analysis of PESTLE
Model, we can now better decided on the information available with us as
what market or product strategy should be chosen. Since it’s the Product
which we are ultimately interested in when we are talking about value
creation, using ANSOFF model to better decide a product, for a relevant
market will help in adding more value for our customer. Awareness of the
product development team, the sales team, and the manufacturing team
about the market and product becomes relevant in this regard and hence
ANSOFF model becomes relevant too.

Communication
Everyone in the organization must know what they are doing and for what
they are doing. This is why communication is important. The analysis and
every insight that we obtained from using the above models will become
effective only when everyone at the organization will be aware of it, and will
share one simple goal. Effective communication of the strategy and goals
must be disseminated and ways should be found out for it. And effective
communication can be insured by the following two essentials for smooth
processing.
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Understanding of Relationship

Commercial as relationships makes the foundation of vertical linkages. The

effects of these relationships on program interventions must be clearly
understood before intervening and regularly analyzed during the course of
an intervention

Trust

Trust is a powerful force that builds loyalty, increases credibility and

supports effective communications. Clear lines of communication,
understanding of the roles and responsibilities of different parties, and a
commitment to fulfilling the terms of agreements are vital for building trust.

Other factors that might influence better communication are Transparency,

clarity, and removal of irrelevant information, a good feedback culture and
an effective system of measuring engagements.

Conclusion
We can conclude from the above discussion that Value creation process is
essential for a firm in today’s world. Since organizations are continuously
looking for competitive advantage and creating value for customer is the
important factor in obtaining the competitive advantage is essential. The
value creation process is explained through the Porter Value creation model.
Which provide a basic understand of how the firm carry out its activities, and
how different activities are classified as Primary and secondary activities.
The porter model view organization as a combination of the activities, and
consider each one important in the final product an organization make. An
enormous amount of research on the effect of value creation chain
management on obtaining competitive advantage is available however how
to find linkages between different functions and activities of the factors
involved in value chain process of a firm is discussed by scholars in their
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own ways. The need to embed the works of different scholars and reports in
a single report was felt the solution of which is in the form of this report.
The reports identified two major ways to find linkages. One is Analysis, and
second is communication. In analysis part the use of three models i.e. Porter
Value Chain model, PESTLE Analysis and ANSOFF model is discussed at
length and in the communication part the ways to use effective
communication are discussed.

Bibliography
Bajpai, P. and Potters, C. (2021) ‘Analyzing Starbucks’ Value Chain’,
Investopedia, pp. 1–9. Available at:
https://www.investopedia.com/articles/investing/103114/starbucks-
example-value-chain-model.asp#citation-1.

Barratt, M. (2004) ‘Understanding the meaning of collaboration in the supply

chain’, Supply Chain Management, 9(1), pp. 30–42. Available at:
https://doi.org/10.1108/13598540410517566.

Donovan, J. et al. (2015) ‘Guides for value chain development: a

comparative review’, Journal of Agribusiness in Developing and Emerging
Economies, 5(1), pp. 2–23. Available at: https://doi.org/10.1108/jadee-07-
2013-0025.

Horvath, L. (2001) ‘Collaboration: The key to value creation in supply chain

management’, Supply Chain Management: An International Journal, 6(5),
pp. 205–207. Available at: https://doi.org/10.1108/EUM0000000006039.

Koc, T. and Bozdag, E. (2017) ‘Measuring the degree of novelty of

innovation based on Porter’s value chain approach’, European Journal of
Operational Research, pp. 559–567. Available at:
https://doi.org/10.1016/j.ejor.2016.07.049.
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Koh, S.C.L. et al. (2007) ‘The impact of supply chain management practices
on performance of SMEs’, Industrial Management and Data Systems, 107(1),
pp. 103–124. Available at: https://doi.org/10.1108/02635570710719089.

‘Leadership Communication: How to Build Trust in the Workplace’ (2019)

Smarp Blog [Preprint]. Available at: https://blog.smarp.com/leadership-
communication-how-to-build-trust-in-the-workplace.

‘migration-PortersValueChainIMGB1’ (no date).

Reding, M. (2021) ‘What is a PESTLE analysis? | How To Do, How To Apply,

Who Created It?’, CPD Online College knowledge base -Business [Preprint].
Available at: https://cpdonline.co.uk/knowledge-base/business/pestle-
analysis/.