Professional Documents
Culture Documents
Developed in 1985 by Michael E. Porter in Competitive Advantage Highlights cost advantages and distinctive capabilities--the value processes But note that there is no one template.
4-1
VC allows alignment of processes with customers. This generates a quality advantage. VC focuses cost management efforts. VC provides for efficient processes which improves the timeliness of operations.
4-2
4-3
Support Activities
Inbound logistics Operations Outbound logistics Sales and marketing Service and support
4-5
Primary Activities
Inbound logistics Procuring, receiving and warehousing raw materials. Operations Machining, assembly and manufacturing products. Outbound logistics Getting the product to the customer. Marketing and sales Advertising, marketing and selling. Service Providing customer support and product repairs.
Support Activities
Procurement: The purchasing of materials used to create value for the firm. Technology Development: Any technology used to support the firms value chain activities. Human Resource: The Activities surrounding the Recruiting, Hiring, Training and compensation of an organizations employees. Firm Infrastructure: The activities and functions that support a firm is ability to create value such legal, accounting, management, strategy, 4-7 STRATEGIC COST MANAGEMENT - BA122B Fall 2008 etc.
Some examples
Document the activities Understand the cost and margins at each step.
4-9
Distribute a summary of the value chain model. Create functional process lists.
4-10
Helps you to stay out of the No Profit Zone Presents opportunities for integration Aligns spending with value processes Provides for reconfiguration of the value chain
Technical:
Increases knowledge of no profit zones Increases knowledge of forward and/or backward integration opportunities Identifies value processes Identifies win-win alliance opportunities
Behavioral:
Focus shifts to the customer Focus shifts from conflict to partnering with customers & suppliers
Cultural
Creates externally focused mindset Generates information sharing environment with respect for confidentiality
4-12
Outsourcing
Strategic Choice to Purchase Some Activities From Outside Suppliers
Firm Infrastructure
Human Resource Management
Support Activities
Technological
Procurement
Operations Inbound Logistics
of their value-creating activities from Development specialty external suppliers who can perform these functions more efficiently
Outbound Logistics
Service
Service
Inbound Logistics
Operations
Outbound Logistics
Primary Activities