Competitive force and value chain
Before I start, I need to introduce two concepts, competitive forceand value chain. Something about competitive forces first, what is competitive forces: forces that shape industries and economic sectors, which can be used to determine the competitive strength or weakness of a company. (www.investorwords.com)Somecompetitive forces include: 1.
Threat of new competition
Threat of substitute products or services
Bargaining power of customers
Bargaining power of suppliers
Intensity of competitive rivalry
Then,what is value chain. The concept of value chain was first come up with Michael Porter to describe how value accumulates along a chain of activities that lead to the end product or service.To better understand the activities through which a firm develops a competitive advantage and creates shareholder value, it is helpful to separate the activities into primary value chain activities and support activities (www.netmba.com) 1.
The primary value chain activities are:
Inbound logistics: the receiving and ware housing of raw materials, and their distribution to manufacturing as they are required. b)
Operations: the processes of transforming inputs finished products and services c)
Outbound logistics: the warehousing and distribution of finished goods. d)
Marketing & Sales: the identification of customer needs and the generation of sales. e)
Services: the support of customers after the products and services are sold to them. 2.
The primary activities are supported by:
The infrastructure of the firm: organizational structure, control systems, company culture, etc. b)
Human resource management: employee recruiting, hiring training, development, and compensation. c)
Technology development: technologies to support value-creating activities. d)
Procurement: purchasing inputs such as materials, supplies, and equipment.
How information systemaffect value chains for competitive advantage.
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