Value chain analysis
DESCRIPTION
An in-depth scan of a firm’s value chain activities and functions aimed at a better understanding of areas of improvement towards higher levels of efficiency and effectiveness.
An in-depth scan of a firm’s value chain activities and functions aimed at a better understanding of areas of improvement towards higher levels of efficiency and effectiveness.
KEY INSIGHTS
A value chain analysis is a method for decomposing the firm into strategically important activities and understanding their impact on cost behavior and differentiation (Hergert and Morris 1989, Porter 1985). Activities analyzed may include primary activities associated with inbound and outbound logistics, operations, marketing and sales, and service, as well as support activities associated with firm infrastructure, human resource management, technology development, and procurement.
A value chain analysis is a method for decomposing the firm into strategically important activities and understanding their impact on cost behavior and differentiation (Hergert and Morris 1989, Porter 1985). Activities analyzed may include primary activities associated with inbound and outbound logistics, operations, marketing and sales, and service, as well as support activities associated with firm infrastructure, human resource management, technology development, and procurement.
KEYWORDS Value, organizational activities, strategic analysis
IMPLICATIONS
A marketer’s examination of the firm’s value chain allows it to optimize its activities economically, efficiently, and effectively, where the interdependencies between activities in the chain, buyers and sellers, as well as between the different strategic business units are analyzed and coordinated. As this entails better management of market-based assets, incorporation of value chain analyses into the firm’s marketing strategy development and evaluation processes may ultimately act to increase shareholder value.
A marketer’s examination of the firm’s value chain allows it to optimize its activities economically, efficiently, and effectively, where the interdependencies between activities in the chain, buyers and sellers, as well as between the different strategic business units are analyzed and coordinated. As this entails better management of market-based assets, incorporation of value chain analyses into the firm’s marketing strategy development and evaluation processes may ultimately act to increase shareholder value.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Day, G. S., andWensley, R. (1988). ‘Assessing Advantage: A Framework for Diagnosing Competitive Superiority,’ Journal of Marketing, 52, 1–20.
Day, G. S., andWensley, R. (1988). ‘Assessing Advantage: A Framework for Diagnosing Competitive Superiority,’ Journal of Marketing, 52, 1–20.
International Marketing
Fitter, R., and Kaplinsky, R. (2001). ‘Who Gains from Product Rents as the Coffee Market Becomes More Differentiated? A Value-Chain Analysis,’ IDS Bulletin, 32(3), 69–82.
Fitter, R., and Kaplinsky, R. (2001). ‘Who Gains from Product Rents as the Coffee Market Becomes More Differentiated? A Value-Chain Analysis,’ IDS Bulletin, 32(3), 69–82.
Business-to-Business Marketing
Kothandaraman, P., and Wilson, D. T. (2001). ‘The Future of Competition: Value- Creating Networks,’ Industrial Marketing Management, 30, 379–389.
Kothandaraman, P., and Wilson, D. T. (2001). ‘The Future of Competition: Value- Creating Networks,’ Industrial Marketing Management, 30, 379–389.
Online Marketing
Amit, R., and Zott, C. (2001). ‘Value Creation in E-business,’ Strategic Management Journal, 22(6–7), 493–520.
Amit, R., and Zott, C. (2001). ‘Value Creation in E-business,’ Strategic Management Journal, 22(6–7), 493–520.
Marketing Education
Elloumi, F. (2004). ‘Value Chain Analysis: A Strategic Approach to Online Learning,’ in Theory and Practice of Online Learning, Athabasca: Athabasca University Press, 61–92.
Elloumi, F. (2004). ‘Value Chain Analysis: A Strategic Approach to Online Learning,’ in Theory and Practice of Online Learning, Athabasca: Athabasca University Press, 61–92.
BIBLIOGRAPHY
Hergert, M., and Morris, D. (1989). ‘Accounting Data for Value Chain Analysis,’ Strategic Management Journal, 10(2), 175–188.
Hergert, M., and Morris, D. (1989). ‘Accounting Data for Value Chain Analysis,’ Strategic Management Journal, 10(2), 175–188.
Porter, Michael E. (1985). Competitive Advantage. New York: The Free Press.
value marketing see enlightened marketing
value pricing see pricing strategies
value pricing see pricing strategies