- Strategic Management - Process
- Strategic Management - Types
- Strategic Management - Introduction
- Strategic Management - Home
Strategic Leadership
The External Environment
- Mapping Strategic Groups
- Judging the Industry
- Analyzing the External Environment
- Organization & Environment
Organizational Resources
- Company Assets: SWOT Analysis
- Other Performance Measures
- The Value Chain
- Intellectual Property
- The Resource Based Theory
Business Level Strategies
Aiding Business Level Strategies
International Marketing Strategies
- International Markets - Competition
- International Strategies - Types
- Drivers of Success and Failure
- Pros & Cons
Cooperative Level Strategies
- Portfolio Planning
- Downsizing Strategies
- Diversification Strategies
- Vertical Integration Strategies
- Concentration Strategies
Strategy and Organizational Design
- Legal Forms of Business
- Organizational Control Systems
- Creating an Organizational Structure
- Organizational Structure
Strategic HR Management
Strategic Management Resources
- Strategic Management - Discussion
- Strategic Management - Resources
- Strategic Management - Quick Guide
Selected Reading
- Who is Who
- Computer Glossary
- HR Interview Questions
- Effective Resume Writing
- Questions and Answers
- UPSC IAS Exams Notes
Strategic Management - Value Chain
The value chain concept is based on the process view of organizations. It is an idea of considering a manufacturing (or service) organization as a dynamic system, made up of various subsystems each with inputs, transformation processes and outputs.
The inputs, transformations, and outputs require the acquisition and consumption of company resources, such as money, equipment, materials, labor, buildings, land, administration and management. The management process of carrying out value chain activities determines the costs and affects the profitabipty of organizations.
Most of the organizations in the real world engage in hundreds, even thousands of activities while converting its inputs to outputs. These activities are classified as either primary or support activities.
According to Michael Porter (1985), the primary activities are −
Inbound Logistics − Inbound logistics refers to the terms with the supppers and includes all of the activities needed to receive, store, and disseminate inputs.
Operations − Operations refer to the entire activities needed to transform the various inputs into outputs (the products and services).
Outbound Logistics − Outbound logistics include all sets of activities needed to collect, store, and distribute the output.
Marketing and Sales − Marketing and sales include the activities to inform buyers regarding the products and services, induce the buyers to purchase them, and enable their purchase.
Service − Service refers to those activities needed to keep the product or service functioning effectively after it is sold and depvered.
Secondary activities include the following −
Procurement − The inheritance of inputs or the various resources for the firm.
Human Resource Management − The activities involved in recruiting, training, improving, compensating and also dismissing personnel.
Technological Development − The equipment, hardware and software, processes and technical knowledge involved in the transformation of inputs into outputs.
Infrastructure − The functions or departments such as accounts, legal and regulative, finance, planning and executing, pubpc affairs and pubpc relations, government relations, quapty management and general management.