Value Chain Analysis

Topics: Michael Porter, Strategic management, Value chain Pages: 2 (607 words) Published: October 27, 2008
In order to gain a competitive edge in business, a company must present an efficient and effective method of conducting business. is a company in need of updating as far as its strategic plan. By using tools such as a Value Chain Analysis, this medical transcription company may have the necessary updates needed to compete in an already extremely competitive field. This paper will attempt to present a valid argument in favor of using value chain analysis at Insert company, Inc, a medical transcription company. What is Value Chain Analysis?

Value Chain Analysis provides a generic framework to analyze both the behavior of costs as well as the existing and potential sources of differentiation. Presented below is Michael Porter’s generic value chain model that was first introduced in 1980. This model demonstrates how value chain analysis works and what is involved in using this tool. By using this model and evaluating activities at Insert company, Inc, the value of using the value chain analysis method is idealized and thus suggested as being a part of the firm’s strategic planning process.

As seen, the primary activities represented by the value chain include inbound logistics, operations, outbound logistics, sales and marketing and services. The secondary activities include administration and infrastructure, human resource management, product and technology development and procurement.

There are essentially three steps to the value chain analysis. These include: Steps in Value Chain Analysis
Value chain analysis can be broken down into a three sequential steps: (1) Break down a market/organization into its key activities under each of the major headings in the model; (2) Assess the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage; (3) Determine strategies built around focusing on activities where competitive advantage can be...

References: (2008). Strategy: Value Chain Analysis. Retrieved October 12, 2008 from http://
Product management and value chain analysis. (2008). Retrieved October 12, 2008 from
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