Author: Michael Porter Presented by: Nachiket Patil

Value Chain
The set of primary activities the company undertakes in order to create or add value to its products or services can be called as value chain. € To add value to the inputs of any process.
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Set of Primary Activities

Primary Activities

Adapted from the model by Porter in Competitive advantage: Creating and Sustaining Superior Performance (1985)

Primary Activities
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Inbound Logistics - The movement of materials from suppliers and vendors into production processes or storage facilities. Operations - Transforming inputs into the final product form

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Primary Activities
‡ Outbound Logistics - The process related to

the movement and storage of products from the end of the production line to the end user.
‡ Marketing & Sales - Providing a means and

incentive which allow buyers to purchase the product
‡ Service - Providing service to enhance or

maintain the value of the product

Set of Support Activities
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Secondary Activities

Firm Infrastructure Human Resource Management Technology Development Procurement

Adapted from the model by Porter in Competitive advantage: Creating and Sustaining Superior Performance (1985)

Support Activities
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Procurement - Function of purchasing inputs used in the value chain. Technology Development Technological development is the process of research and development of technology. Many emerging technologies are expected to become generally applied in the near future.

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Support Activities
Human Resource Management - Human resource management (HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people € Firm Infrastructure serves the company's needs and ties its various parts together, it consists of functions or departments such as accounting, legal, finance, planning, public affairs, government relations, quality assurance and general management.
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Value Chain ± 3 Step Process
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1.- Activity Analysis - Brainstorm on activities that are required and lay down flowchart. 2.- Value Analysis ± The things that your customer value.

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Value Chain ± 3 Step Process
3.- Evaluate changes and plan for action € I ± Pick out quick, easy cheap wins to boost team morale. € II ± Remove changes that are impractical and high cost € III ± Prioritize remaining tasks and do a step by step improvement.
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Example- Software development

Source: www.mindtools.com

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