Business Models Strategy Use Of Porter S 1985 Value Chain Framework
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Business Models & Strategy
The Business Models & Strategy blog is an online resource center for entrepreneurs, small business owners, business and marketing professionals. Our goal is to provide relevant information, educate and engage with all the professional that are interested in business and strategy. Home
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Use of Porter’s (1985) Value Chain Framework
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Use of Porter’s (1985) Value Chain Framework
Porter’s model of value chain is one of the best known and widely applied models of a company’s valuecreation processes (Sanchez and Heene, 2004). According to
Porter:
“Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation”
(Porter, 1985:33)
competitive strategy (8)
Porter (1985), Besanko et al. (1996), and McGuffog & Wadsley (1999) identify that a company’s profitability is a function not only of industry conditions, but also of the amount of value it creates relative to its competitors. A firm can achieve competitive advantage if it posses ‘capabilities’ that allow it to create not only positive value but as well additional total value than its competitors (Porter, 1985;
Hooley et al, 2004). By understanding why a company can create value and whether it can continue to it in the future is a necessary first step in diagnosing a firm’s potential for achieving a competitive advantage in the marketplace (Hitt et al, 2007; Spanos and Lioukas, 2001). Therefore, a firm must understand how its products serves customer needs better than potential substitutes; the technology of production, distribution and sales; and the business’s costs (Porter, 1985).
Strategy Quotes (1)
According
More Next Blog»
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Business Models & Strategy
The Business Models & Strategy blog is an online resource center for entrepreneurs, small business owners, business and marketing professionals. Our goal is to provide relevant information, educate and engage with all the professional that are interested in business and strategy. Home
Business Toolkits
T h ur s day, June 30, 2011
Labels
Use of Porter’s (1985) Value Chain Framework
Checklists (2)
Use of Porter’s (1985) Value Chain Framework
Porter’s model of value chain is one of the best known and widely applied models of a company’s valuecreation processes (Sanchez and Heene, 2004). According to
Porter:
“Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation”
(Porter, 1985:33)
competitive strategy (8)
Porter (1985), Besanko et al. (1996), and McGuffog & Wadsley (1999) identify that a company’s profitability is a function not only of industry conditions, but also of the amount of value it creates relative to its competitors. A firm can achieve competitive advantage if it posses ‘capabilities’ that allow it to create not only positive value but as well additional total value than its competitors (Porter, 1985;
Hooley et al, 2004). By understanding why a company can create value and whether it can continue to it in the future is a necessary first step in diagnosing a firm’s potential for achieving a competitive advantage in the marketplace (Hitt et al, 2007; Spanos and Lioukas, 2001). Therefore, a firm must understand how its products serves customer needs better than potential substitutes; the technology of production, distribution and sales; and the business’s costs (Porter, 1985).
Strategy Quotes (1)
According
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