The document discusses the value chain concept. A value chain is a string of companies working together to satisfy market demand for a product. It analyzes the primary and support activities within a company that add value to products. The primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities include firm infrastructure, human resource management, technology development, and procurement. Benefits of value chain analysis include streamlining supply chains and improving business performance. Limitations are that it assesses value theoretically rather than practically.

1. BY
SAI CHITRA20789025
DINESH 20815344
SANDEEP 20817207
MANEESH 20817347

2. VALUE........?
VALUE is not define by the factory or by the supply
chain.
VALUE is define by the customers.
It depends on:
Q-Quality of the product
S-Service of the product
P-Price of the product

3. VALUE CHAIN
 The value chain, also known as value chain analysis, is a concept from business
management that was first described and popularized by Michael Porter in his 1985
best-seller, Co m pe titive Advantag e : Cre ating and Sustaining Supe rio rPe rfo rm ance .
 A Value Chain is a String of Companies or Players working together to satisfy market
demand for a particular product .
 Value chain is critical tool to business development because it espoused the idea that,
according to Kotelnikov (2001) “success in digital economy is the implementation of an
integrated value chain that extends across - and beyond - the enterprise.”
 The value chain framework has been used as a powerful analysis tool for the strategic
planning of an organisation for nearly two decades. The aim of the value chain
framework is to maximise value creation while minimising costs.

4. Support activities
 The support activities of a company include the following:
 Firm Infrastructure
This includes planning and control systems, such as finance, accounting, and
corporate strategy etc. (Lynch, 2003).
 Human Resource Management
This is a function concerned with recruiting, training, motivating and rewarding the
workforce of the company. Human resources are increasingly becoming an important
way of attaining sustainable competitive advantage.
 Technology Development
This is an area that is concerned with technological innovation, training and
knowledge that is crucial for most companies today in order to survive.
 Procurement
This function is responsible for purchasing the materials that are necessary for the
company’s operations. An efficient procurement department should be able to obtain
the highest quality goods at the lowest prices.

5. Primary Activities
 The primary activities (Porter, 1985) of the company include the following:
 Inbound logistics
They are received and stored until they are needed on the production/assembly line .
 Operations
This is where goods are manufactured or assembled .
Example , hotel or the final tune for a new car’s engine .
 Outbound logistics
Distributing the final product .
Example, in case of a hotel this activity would entail the ways of bringing customers to the
hotel.
 Marketing and sales
At this stage the organisation prepares the offering to meet the needs of targeted
customers.
 Service
Need to provide services for customers such as pre-installation before or after the sale of
the product or service and so on.

6. Benefits of Value Chain
 value chain strategy helps to streamline the supply chain process, giving
balance to it and professionally deliver the products end to end from
manufacturing to the end level of distribution.
 Value chain strategy definitely increase efficiency of the organization by
streamlining the process and it helps organization to save lot of resources
which results in eliminating wastage’s and save money and which will help
organization to provide competitive products to the end consumers.
 Business performance will be improved on all the major departments such as
production, sales and transportation. On each department you can monitor
what is happening and easily make decisions to improve it.
 Bridges the gaps between each process in the chain, finding out the gaps will
be very easier and organization can concentrate on a particular process which
is very weak and strengthen and make it a fail safe solution.
 Helps to plan about the supply according to the demand and determine the
distribution strategy and make adequate changes to it.

7. Limitations of Value Chain
 The limitations of the model include the fact that ‘value’ for the final customer
is the value only in its theoretical context (Svensson, 2003), and not practical
terms. The real value of the product is assessed when the product reaches
the final customer, and any assessment of that value before that moment is
only something that is true in theory. Despite this limitation, analysts can
effectively use the value chain model to determine the value to the final
customers in a theoretical way.
 Use of other planning tools and techniques like Porter’s generic strategies,
analysis of critical success factors etc. is recommended in conjunction with
the value chain framework for a more comprehensive analysis of a
company’s strategy and planning.