About Value Chain Analysis:
Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. A value chain identifies and isolates the various economic value adding activities such as differentiating a product, lowering the cost, and meeting need quickly that occur some way in every firm. It portrays activities required to create value for customers of a given product or service. It tells where low cost advantages exist; in what ways each activity can be undertaken so as to differentiate it from that of a firm’s competitor, how to deliver satisfaction to customers as quickly as possible. Business is viewd as a process, a chain of activities in order to find the strengths and weakness of a firm operating in a competitive environment. Competitive advantage is created and sustained only when a firm is able to perform the most critical functions either more cheaply or better than its competitors.
The value creating activities of a firm, according to Michael Porter suggested that the is grouped under two headings:
(1) Primary Activities - those that are directly concerned with creating and delivering a product .
(2) Support Activities, which are not directly involved in production, but may increase effectiveness or efficiency and work to enhance or to help the functioning of primary activities.
Linking Value Chain Analysis to Competitive Advantage
A business which wishes to outperform its competitors through differentiating itself through higher quality will have to perform its value chain activities better than the opposition. By contrast, a strategy based on seeking cost leadership will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used.
About Pizza Hut:
Yum! Brands Inc is the owner of the Pizza Hut chain worldwide. A Fortune 300 company, Yum! Brands owns... [continues]
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