Discuss the Relationship Between Processes and Value Chains

Topics: Business process modeling, Value chain, Strategic management Pages: 2 (440 words) Published: November 20, 2012
Essay question 1:

Discuss the relationship between processes and value chains

Business processes and value chain models are both important components in a company's overall success. These elements work together, as the benefits that the value chain provides contribute to the business processes by giving customers a reason to buy, generating revenue and keeping the company afloat. A value chain model represents the qualities that make products and companies successful from the customers' point of view, while the business model describes the systems that make a company viable for its owners and investors.

The Business
A business process is the set of protocols and systems that govern how a company generates revenue and earns a profit. The product or service that a company sells is part of its business model, as is the way that it keeps its customers satisfied and coming back for more. Business models address profitability as well as sales revenue, describing the ways that a company invests capital in order to generate income, by creating and selling inventory, or creating a business location that attracts paying customers. Business process is the fundamental to business processes to achieve dramatic improvements in measures of performance such as “quality, cost, speed, and services”. Business processes did not start with the "Internet Age". Porter's model goes back to 1985. The need for this organizational and economical change is even more obvious today globalization, the integration of companies, mergers, a higher need for standardization force enterprises as well non-commercial organizations to change and adapt to the new economy.

The Value Chain
A value chain model describes the ways that a company tailors its products and services to meet the needs of current and prospective customers. Every business needs to meet the needs of its clients, and companies achieve this objective by creating useful products, providing services that generate...
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