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2. Value Chain Analysis Framework
2
Primary
Activities
Support
Activities
Firm Infrastructure
Human resource management
Technology Development
Procurement
Management, Finance, Legal,
Planning
Professional development, Employee relations, Performance
appraisals, Recruiting, Competitive wages, Training programs
Integrated supply chain system, Real-time sales
information
Real-time inventory, Communication with suppliers,
Purchase supplies and materials
Inbound
Logistics
Operations Outbound
Logistics
Marketing &
Sales
After Sales
Service
› Real-time inbound
inventory data
› Location of
distribution facilities
› Trucks
› Material Handling
› Warehouse
› Standardized
model
› Access to real-time
sales & inventory
system
› Order processing
› Full delivery trucks
› Pricing
› Communication
› Promotion
› Product based on
community needs
› Low prices
› Delivery
› Installation
› Repair
› Greeters
› Customer service
focus
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3. Primary Activities
3
PrimaryActivityDescription
Operations
The manufacture of
products and services –
the way in which resource
inputs (e.g. materials) are
converted to outputs (e.g.
products)
Inbound
Logistics
All those activities
concerned with receiving
and storing externally
sourced materials
Service
All those activities
associated with
maintaining product
performance after the
product has been sold
Outbound
Logistics
All those activities
associated with getting
finished goods and
services to buyers
Marketing & Sales
Essentially an information
activity – informing buyers
and consumers about
products and services
(benefits, use, price etc.)
4. Secondary Activities
4
SecondaryDescription
Procurement
All those activities concerned
with receiving and storing
externally sourced materials
Human Resource
Management
The manufacture of products
and services – the way in which
resource inputs (e.g. materials)
are converted to outputs (e.g.
products)
Technology
Development
All those activities associated
with getting finished goods and
services to buyers
Infrastructure
Essentially an information
activity – informing buyers and
consumers about products and
services (benefits, use, price
etc.)
5. Value Chain – Approaches To Perform Analysis
5
Competitive
Advantages
Types
There are two different approaches on how to perform the analysis, which depend on what type of
competitive advantage a company wants to create
This approach is used when organizations try to
compete on costs & want to understand the
sources of their cost advantage or disadvantage
& what factors drive those costs
Cost Advantage
The firms that strive to create superior products
or services use differentiation advantage
approach
Differentiation Advantage
6. Cost Advantage
6
Identify the firm’s primary and
support activities
› All the activities (from receiving and
storing materials to marketing, selling
and after sales support) that are
undertaken to produce goods or services
have to be clearly identified and
separated from each other
› This requires an adequate knowledge of
company’s operations because value
chain activities are not organized in the
same way as the company itself
Step
1
Step
2
Establish the relative importance
of each activity in the total cost
of the product
› The total costs of producing a product or
service must be broken down and assigned
to each activity. Activity based costing is
used to calculate costs for each process
› Activities that are the major sources of cost
or done inefficiently (when benchmarked
against competitors) must be addressed first
7. Cost Advantage
7
Identify cost drivers for each
activity
› Only by understanding what factors drive
the costs, managers can focus on
improving them.
› Costs for labor-intensive activities will be
driven by work hours, work speed, wage
rate, etc
Identify links between activities
› Reduction of costs in one activity may lead to
further cost reductions in subsequent activities.
› Identifying the links between activities will lead
to better understanding how cost improvements
would affect he whole value chain
Step
3
Step
4
Step
5
Identify opportunities for
reducing costs
› When the company knows its inefficient
activities and cost drivers, it can plan on how
to improve them
› Too high wage rates can be dealt with by
increasing production speed, outsourcing jobs
to low wage countries or installing more
automated processes
8. Differentiation Advantage
8
After identifying all value chain activities,
managers have to focus on those
activities that contribute the most to
creating customer value
Managers can use the following strategies to increase
product differentiation and customer value:
› Add more product features
› Focus on customer service & responsiveness
› Increase customization
› Offer complementary products
Usually, superior differentiation and customer
value will be the result of many interrelated
activities and strategies used. The best
combination of them should be used to pursue
sustainable differentiation advantage
Identify the
Customers’ Value-
creating Activities
Step 1
Evaluate the
Differentiation
Strategies for
Improving
Customer Value
Step 2
Identify the Best
Sustainable
Differentiation
Step 3
9. Value Chain Analysis – 3 Step Process
9
Identify the activities
you undertake to
deliver your product or
service
For each activity thin
through what you
would do to add the
greatest value for your
customer
Evaluate whether it is
worth making
changes, and then
plan for action
Activity
Analysis
Value
Analysis
Evaluation
& Planning
10. Competitor’s Value Analysis
10
Value
Activity 1
Value
Activity 2
Value
Activity 3
Value
Activity 4
Value
Activity 5
Competitor 1
Competitor 2
Competitor 3
Competitor 4
Competitor 5
Competitor 6
Competitor 7
Competitor 8
13. 13
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100
FY' 07 FY' 08 FY' 09 FY' 10 FY' 11 FY' 12 FY' 13 FY' 14 FY' 15 FY' 16 FY' 17 FY' 18
Financial Year 2018
Sales in Percentage(%)
> Product 2
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> Product 1
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Line Chart
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FY' 07 FY' 08 FY' 09 FY' 10 FY' 11 FY' 12 FY' 13 FY' 14 FY' 15 FY' 16 FY' 17 FY' 18
Scatter Chart
14
Sales in Percentage(%)
30%> Product 1
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FY' 18FY' 17FY' 16FY' 15FY' 14FY' 13FY' 12FY' 11
> Product 2
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> Product 1
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Area Chart
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FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09
Profit(Milliondollars)
> Product 2
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> Product 1
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Stock Chart
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19. Our Mission
19
Vision
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Mission
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Goal
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20. Our Team
20
Mary Parker
CEO & Founder
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Robin Clark
Finance Manager
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Jess Leo
Designer
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21. Our Goal
21
Text
Here
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22. 22
About Us
Target Audiences
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Preferred By Many
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Valued Clients
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23. 23
Comparison
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60% 40%
24. Financial
24
Minimum
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15%
Medium
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20%
Maximum
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35%
25. The important word there is inspire. The key
different between manager and leader is that
managers tell people what to do, while leaders
inspire them to do it. Inspiration comes from three
things. Clarity of one’s vision, courage of their
conviction and the ability to effectively communicate
both of those things.
25
- Jeff Weiner
Quotes
26. Dashboard
26
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20
100
60
80%
(High)
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20
100
60
40%
(Low)
27. Location
27
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Population
50%
80%
CANADAUSA
Population
90%
50%
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28. Puzzle
28
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04
01
02
03
29. 29
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Target
30. Circular
30
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01
02
03
04
05
06
07
08
Text
Here
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Venn
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Mind Map
32
33. Silhouettes
33
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01
02
03
34. Lego
34
01
02
03
05
04
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35. Hierarchy
35
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Bulb Or Idea
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Magnifying
Glass
38. 38
Address
# street number, city, state
Contact Numbers:
0123456789
Email Address:
emailaddress@gmail.com
Thank you
For Your Attention