Value Chain Analysis
A research paper that includes a value chain analysis is generally for a business or MBA course. Paper Masters has writers that specialize in business projects that include a value chain analysis. We show you how to write one here or we can help you personalize your analysis in a custom written MBA project.
A value chain analysis is a tool that is commonly used in strategic management initiatives. Developed by Michael Porter, the value chain analysis determines the following three elements:
- Competitive advantage
- Core competencies
- Shareholder value
In order to conduct a value chain analysis, a firm's business systems are categorized as value generating activities into a flow chart format. Some common value generating activities included in the flow chart format are inbound logistics, operational processes, outbound logistics, sales & marketing processes, and customer service processes. The supporting activities that are utilized by a firm in order to achieve maximum value and benefit are also included in the value chain analysis.
These supporting activities are listed underneath the flow chart format. Some common supporting activities include human resources, technology, organizational structure, corporate culture, company systems, and more. In order to measure competitive advantage, core competencies, and shareholder value in the value chain analysis, Porter created two measurement tools:
- Cost advantage
- Differentiation
A firm's cost advantage is determined by measuring its capacity utilization, method of market entry, strategic partnerships and external relationships, and training and development. A firm's differentiation is determined by measuring its scale, internal relationships, staff knowledge and competency, geographic location, and unique selling proposition.