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Porter’s Value Chain Assignment Help

Value chain essentially is a description of the functions of an organization within and encompassing that the organization is most likely to execute. There are linkages between these functions and the competitive strength of organizations.

Hence, it’s evaluated as to the exact value addition of a particular function to the products or services of organizations. This is an insightful notion as it acknowledges the fact that organizations aren’t simply made of machinery, equipment, people and money compiled randomly.

In other words, only when these aspects of an organization are systematically streamlined would it be possible to manufacture something that the customers would want to pay a price for. Arguably according to Porter, the capability of executing certain functions and managing linkages among the varied functions is in itself a competitive advantage. Porter differentiates among primary and support activities.

Primary activities are those functions that are directly related to production or delivery of a product or service. The categorizations of the primary functions are

  • inbound logistics
  • outbound logistics
  • operations
  • marketing and sales and
  • service

All primary activities have linkages with support activities that aid and abet improvement and effectiveness. The categorization of support activities are

  • procurement
  • technology research and development
  • human resource management and
  • infrastructure which includes systems for
  • planning
  • finance
  • quality
  • information management

so on and so forth

The rudimentary prototype of Porter’s Value Chain in relation to profit margin is that it’s customary for organizations to expect a profit margin. However, whether or not organizations would have a margin of profit would to a great extent depend on their efficacy in managing the linkages among activities that are an integral part of the value chain. What this means is that organizations can deliver products or services and customers are more than eager and willing to pay a price that is inclusive of all costs that are a part of the value chain.

In order for the corporate to be successful, the linkages are vital. The linkages are essentially flow of information, goods and services, along with systems and procedures for the adjustment of functions. If the activity of marketing and sales results in sales prediction for the upcoming period to other departments accurately and in a timely manner, procurement would be able to place orders for the material required on a certain date.

Procurement in turn, efficiently and in a timely fashion redirects order data to inbound logistics. Operations picks it up from there and schedules production that guarantees products being delivered on time and effectively based on the suggestion or recommendation of marketing.

In majority of industries, there isn’t any single company performing functions ranging from product design, manufacture of components, and final assembly to delivery on their own. Often, organizations are a cog in the wheel that is the value chain. Hence, value chain analysis should encompass the entire value system which the organization is a part of.

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