Information systems are integral to modern organizations, supporting operations, knowledge work, and management. An information system consists of hardware, software, databases, telecommunications, procedures, and human resources. It collects, stores, and processes data and delivers information to users. Information systems allow organizations to manage their operations more efficiently and compete effectively. They also support individuals in conducting personal activities. However, ensuring security and controlling access to sensitive information is important.

1. HOW INFORMATION SYSTEM IS EFFECT ON AN ORGANIZATION
Author- Younus Miraj
Shanto-Mariam University of Creative & Technology
UTTARA-DHAKA

2. Information system
Information system is an integrated set of components for collecting, storing, and processing
data and for deliveringinformation, knowledge, and digital products. Business firms and other
organizations rely on information systems to carry out and manage their operations, interact
with their customers and suppliers, and compete in the marketplace. For instance,
corporations use information systems to reach their potential customers with targeted
messages over the Web, to process financial accounts, and to manage their human resources.
Governments deploy information systems to provide services cost-effectively to citizens.
Digital goods, such as electronic books and software, and online services, such as auctions
and social networking, are delivered with information systems. Individuals rely on
information systems, generally Internet-based, for conducting much of their personal lives:
for socializing, study, shopping, banking, and entertainment.
Components of information systems
The main components of information systems are computer hardware and software,
telecommunications, databases and data warehouses, human resources, and procedures. The
hardware, software, and telecommunications constitute information technology (IT), which is
now ingrained in the operations and management of organizations. A to Z[1]
Computer hardware
Today even the smallest firms, as well as many households throughout the world, own or
lease computers. These are usually microcomputers, also called personal computers.
Individuals may own multiple computers in the form of smartphones and other portable
devices. Large organizations typically employ distributed computer systems, from powerful
parallel-processing servers located in data centers to widely dispersed personal computers
and mobile devices, integrated into the organizational information systems. Together with the
peripheral equipment, such as magnetic or solid-state storage disks, input-output devices, and
telecommunications gear, these constitute the hardware of information systems. The cost of
hardware has steadily and rapidly decreased, while processing speed and storage capacity
have increased vastly. However, hardware’s use of electric power and its environmental
impact are concerns being addressed by designers.
Computer software
Computer software falls into two broad classes: system software and application software.
The principal system software is the operating system. It manages the hardware, data and
program files, and other system resources and provides means for the user to control the
computer, generally via agraphical user interface (GUI). Application software is programs
designed to handle specific tasks for users. Examples include general-purpose application
suites with their spreadsheet and word-processing programs, as well as ―vertical‖ applications
that serve a specific industry segment—for instance, an application that schedules, routes,
and tracks package deliveries for an overnight carrier. Larger firms use licensed applications,
customizing them to meet their specific needs, and develop other applications in-house or on
an outsourced basis. Companies may also use applications delivered as software-as-a-service
over the Web. Proprietary software, available from and supported by its vendors, is being
challenged by open-source software available on the Web for free use and modification under
a license that protects its future availability.

3. Telecommunications
Telecommunications are used to connect, or network, computer systems and transmit
information. Connections are established via wired or wireless media. Wired technologies
include cable and fiber. Wireless, technologies, predominantly based on the transmission
of microwaves andradio waves, support mobile computing. Pervasive information systems
have arisen with the computing devices embedded in many different physical objects. For
example, sensors such as radio frequency identification devices can be attached to products
moving through the supply chain to enable the tracking of their location and the monitoring
of their condition. Wireless sensor networks that are integrated into the Internet can produce
massive amounts of data that can be used in seeking higher productivity or in monitoring the
environment.
Databases and data warehouses
Many information systems are primarily delivery vehicles for data stored in databases.
A database is a collection of interrelated data (records) organized so that individual records or
groups of records can be retrieved to satisfy various criteria. Typical examples of databases
include employee records and product catalogs. Databases support the operations and
management functions of an enterprise. Data warehouses contain the archival data, collected
over time, that can be mined for information in order to develop and market new products,
serve the existing customers better, or reach out to potential new customers. Anyone who has
ever purchased something with a credit card—in person, by mail order, or over the Web—is
included within such data collections.
Human resources and procedures
Qualified people are a vital component of any information system. Technical personnel
include development and operations managers, business analysts, systems analysts and
designers, database administrators, computer programmers, computer security specialists, and
computer operators. In addition, all workers in an organization must be trained to utilize the
capabilities of information systems. Billions of people around the world are learning about
information systems as they use the Web.
Function of information systems
Information systems support operations, knowledge work, and management in organizations.
(The overall structure of organizational information systems is shown in the figure.)
Functional information systems that support a specific organizational function, such as
marketing or production, have been supplanted by cross-functional systems. Such systems
can be more effective in the development and delivery of the firm’s products and can be
evaluated more closely with respect to the business outcomes. A to Z[2]
Figure 1:Process of information, communication and technology.
INFORMATION
COMMUNICATION
TECHNOLOGY

4. Support of knowledge work
A large proportion of work in an information society involves manipulating abstract
information and knowledge (understood in this context as an organized and comprehensive
structure of facts, relationships, theories, and insights) rather than directly processing,
manufacturing, or delivering tangible materials. Such work is called knowledge work. Three
general categories of information systems support such knowledge work: professional
support systems, collaboration systems, and knowledge management systems.
Management support
A large category of information systems comprises those designed to support
the management of an organization. These systems rely on the data obtained by transaction
processing systems, as well as on data and information acquired outside the organization (on
the Web, for example) and provided by business partners, suppliers, and customers.
MANAGEMENT REPORTING SYSTEMS
Information systems support all levels of management, from those in charge of short-term
schedules and budgets for small work groups to those concerned with long-term plans and
budgets for the entire organization. Management reporting systems provide routine, detailed,
and voluminous information reports specific to each manager’s areas of responsibility. These
systems are typically used by first-level supervisors. Generally, such reports focus on past
and present activities, rather than projecting future performance. To prevent information
overload, reports may be automatically sent only under exceptional circumstances or at the
specific request of a manager.
Managing information systems
For an organization to use its information services to launch a new initiative, those services
have to be part of a well-planned infrastructure of core resources. The specific systems ought
to be configured into a coherent architecture to deliver the necessary information services.
Many organizations rely on outside firms—that is, specialized IT companies—to deliver
some, or even all, of their information services. If located in-house, the management of
information systems can be decentralized to a certain degree to correspond to the
organization’s overall structure.
Organization of information services
Information services of an organization are delivered by an outside firm or by an internal
unit. Outsourcing of information services helps with such objectives as cost savings, access to
superior personnel, and focusing on core competencies.
In many organizations, information systems are headed by a chief information officer. The
activities of information services are usually supervised by a steering committee consisting of
the executives representing various functional units of the organization. In the organizations
where information systems play a strategic role, boards of directors need to be involved in
their governance. As described below, a vital responsibility of an information services unit is
to ensure uninterrupted service and integrity of the systems and information in the face of
many security threats.

5. Information systems security and control
With the opening of information systems to the global Internet and with their thorough
infusion into the operation and management of business and government organizations and
into the infrastructure of daily life across the world, security issues have moved to the
forefront of concerns about global well-being. A to Z[3]
Information systems security
Information systems security is responsible for the integrity and safety of system resources
and activities. Most organizations in developed countries are dependent on the secure
operation of their information systems. In fact, the very fabric of societies often depends on
this security. Information systems are at the heart of intensive care units and air traffic control
systems. Financial institutions could not survive a total failure of their information systems
for longer than a day or two. Electronic funds transfer systems (EFTS) handle immense
amounts of money that exist only as electronic signals sent over the networks or as
magnetized spots on storage disks. Information systems are vulnerable to a number of threats,
which require strict controls such as countermeasures and regular audits to ensure that the
system remains secure.
Computer crime and abuse
Computer crime is illegal acts in which computers are the primary tool costs the world
economy billions of dollars annually. Computer abuse does not rise to the level of crime, yet
it involves unethical use of a computer. The objectives of the so-called hacking of
information systems include vandalism, theft of consumer information, governmental and
commercial espionage, sabotage, and cyber war. Some of the more widespread means of
computer crime include phishingand planting of malware, such as computer viruses and
worms, Trojan horses, and logic bombs.
Information systems controls
To ensure secure and efficient operation of information systems, an organization institutes a
set of procedures and technological measures called controls. Information systems are
safeguarded through a combination of general and application controls.
General controls apply to information system activities throughout an organization. The most
important general controls are the measures that control access to computer systems and the
information stored there or transmitted over telecommunications networks. General controls
include administrative measures that restrict employees’ access to only those processes
directly relevant to their duties. As a result, these controls limit the damage that any
individual employee or employee impersonator can do. Fault-tolerant computer systems
installed in critical environments, such as in hospital information systems or securities
marketplaces, are designed to control and isolate problems so that the system can continue to
function.

6. Organizational impacts of information systems
Several essential organizational capabilities are enhanced by information systems. These
systems provide support for business operations; for individual and group decision making;
for new product development; for relationships with customers, suppliers, and partners; for
pursuit of competitive advantage; and, in some cases, for the business model itself
(e.g., Google). Information systems bring new options to the way companies interact and
compete, the way organizations are structured, and the way workplaces are designed. In
general, use of Web-based information systems can significantly lower the costs of
communication among workers and firms and cost-effectively enhance the coordination of
supply chains or webs. This has led many organizations to concentrate on their core
competencies and to outsource other parts of their value chain to specialized companies. The
capability to communicate information efficiently within a firm has led to the deployment of
flatter organizational structures with fewer hierarchical layers.
Nevertheless, information systems do not uniformly lead to higher profits. Success depends
both on the skill with which information systems are deployed and on their use being
combined with other resources of the firm, such as relationships with business partners or
superior knowledge of the industry.
The use of information systems has enabled new organizational structures. In particular, so-
called virtual organizations have emerged that do not rely on physical offices and standard
organizational charts. Two notable forms of virtual organizations are the network
organization and the cluster organization.
Information systems development
Information technology departments in larger organizations tend to strongly influence
information technology development, use, and application in the organizations, which may be
a business or corporation. A series of methodologies and processes can be used to develop
and use an information system. Many developers have turned and used a more engineering
approach such as the System Development Life Cycle (SDLC) which is a systematic
procedure of developing an information system through stages that occur in sequence. An
Information system can be developed in house (within the organization) or outsourced. This
can be accomplished by outsourcing certain components or the entire system. A specific case
is the geographical distribution of the development team.
Information System development is done in stages which include:A to Z[4]
Problem recognition and specification
Information gathering
Requirements specification for the new system
System design
System construction
System implementation
Review and maintenance.[4]

7. PORTER’S VALUE CHAIN ANALYSIS
The value chain as the internal processes or activities a company performs ―to design,
produce, market, deliver and support its product.‖ Apparel industry is a peculiar player of the
fashion market, whose action oppose to most of industry representatives. Common industry
practice is to focus on design and branding issues to concentrate on the core business. But
Apparel acts differently, they are fully-integrated: from dye house and knitting factories to
international fashion retail chain. At the same time company cares a lot about marketing that
may be rather provoking, though cheap and efficient and logistics processes. By combining
these specific factors company has created its image and has taken a strong market position –
due to their specific business model that involves harsh control on all levels.
PRIMARY ACTIVITIES
Inbound logistics
Operations
Outbound logistics
Marketing and sales
Service
Figure 2: Flow chart of primary activities of value chain.
SUPPORT ACTIVITIES
Procurement
Technology development
Human resource management
Firm infrastructure
Figure 3: Support activities of value chain.
INBOUND
LOGISTICES
SERVICESOPERTIONS OUTBOUND
LOGISTICES
MARKETING
& SELLS
PROCUREMENT
HUMAN RESOURCES
MANAGEMENT
FIRM INFRASTRUCTURE
TECHNOLOGY
DEVELOPMENT

8. VALUE CHAIN ANALYSIS
To better understand the activities through which a firm develops a competitive advantage
and creates shareholder value, it is useful to separate the business system into a series of
value-generating activities referred to as the value chain. In his 1985 book Competitive
Advantage, Michael Porter introduced a generic value chain model that comprises a sequence
of activities found to be common to a wide range of firms. Porter identified primary and
support activities as shown in the following diagram:
Figure 4:value chain analysis.
VALUE CHAIN ANALYSIS OF WAL-MART
One of the primary goals of any business is to gain an edge on their competition. One way to
do so is to conduct a value chain analysis, which examines what organizations can do to
create a competitive advantage, while at the same time provide the greatest value to their
consumers.The value chain analysis involves identifying each part of the value chain and
seeing where improvements can be made either from a production standpoint or a cost
perspective to ensure consumers are getting the most bangs for their buck. When consumers
are getting the most out of a product for the cheapest cost, businesses will benefit in the long
run. Now we are discussing about value chain analysis of Wal-Mart.
Figure 5:value chain analysis of Wal-Mart.

9. FIRM INFRASTRUCTURE
Wal-Mart has 2485 stores, 682 Supercentres, 457 Sam’s Clubs, 5 Wal-Mart Neighbourhood
Markets and 1007 units of Wal-Mart International. It serves over 100 million customers
weekly worldwide. There are 1035000 associates, and the company is America’s largest
private employer. [5]
HUMAN RESOURCES MANAGEMENT
Almost 60% of all managers in Wal-Mart stores started as hourly associates. The employees
are encouraged to communicate openly, offer new ideas, take risks, strive for excellence and
have fun. Employees are getting competitive wages and comprehensive benefits. In recruiting
new associates the company begins a comprehensive recruitment program in the community
where the store is to identify candidates. When new employees start at Wal-Mart they are
presented to the two basic rules of Wal-Mart. These are:
Rule 1: The customer is always right
Rule 2: If the customer happens to be wrong, refer rule 1.
TECHNOLOGY DEVELOPMENT
Wal-Mart set up its own satellite communication system in 1983. Wal-Martuses Bar-coding
& RFID technologies, different processes like efficient picking; receiving & proper inventory
control of the products along with easy packing and counting of the inventories was
ensured.Electronic data interchange is a computer-to-computer exchange of business
documents
PROCUREMENT
Wal-Mart’s process of procurement involves and reducing its purchasing costs as far as
possible so that it can offer best price to its customers. The company procures goods directly
from the manufacturers, bypassing all intermediaries.
– FLOW-TIME ANALYSIS
Wal-Mart’s merchandise replenishment cycle is no more than 48 hrs.
Point-of-sale
system
captures data
in real-time
Data is
transmitted to
warehouses
for Inv. Mgmt.
Retail Link
transmits
data to
supplier
Orders are
generated from
previous-day
sales
Merchandise is
loaded onto
trucks using
cross-docking
Merchandise
is delivered to
the store
Merchandise is
manufactured
based on historical
and real-time data
Merchandise
is shipped to
warehouses
Customer
made a
purchase
The store will re-
stock the shelves
with merchandise

10. Figure 6: Flow time analysis of Wal-Mart.
INBOUND LOGISTICS
The drivers are tracked regularly through ―Private Fleet Driver handbook‖ Mart uses a
logistics technique called ―Cross Docking‖. Wal-Mart today about 60% inbound freight
(closer to 80% for their grocery segment) is managed by suppliers. The important of Wal-
Mart's logistics infrastructure was its fast and responsive transportation system. The
distribution centres were serviced by more than 3,500 company owned trucks.[5]
– WAL-MART'S BUSINESS LOGIC
There are given flow chart of Wal-Mart business logic.
Figure 7: Flow chart of Wal-Mart business logic.
OPERATIONS
Wal-Mart operations are comprised of three business segments. These are
WAL-MART STORES
 Super- centres
 Discount Stores
 Neighbourhood Markets
SAM’S CLUB-SAM’S CLUB
WAL-MART INTERNATIONAL
MARKETING AND SALES
Employees wore blue vests to identify themselves. Aisles were wide. Apparel departments
were carpeted in warm colours. A store employee followed customers to their cars to pick up
Lower prices
From suppliers
More goods soldmore
goods sold
More customers
Everyday low prices

11. their shopping carts. Customer was welcomed at the door by a ―people greeter,‖ who gave
directions and struck up conversations.
Figure 8: Prices analysis of Wal-Mart products.
SERVICE
Opening hours at Wal-Mart generally range from 7.00 a.m. to 11.00 p.m. six days a week,
and from 10.00 a.m. to 8.00 p.m. on Sunday. All Wal-Mart stores maintain uniform prices,
except where lower prices are necessary to meet local competition. Sales are primarily on a
self-service, cash-and-carry basis with the objective of maximizing sales volume and
inventory turnover while minimizing expenses. Bank credit card programs, operates without
recourse to the Company is available in all stores.The replenishment system also helps the
store adjust to customers’ demands. The stores are organised the same way all over the world,
so the customers will recognise the stores wherever they go.
WAL-MART’S VALUE CHAIN
There are given the below shortcut system of Wal-Mart value chain. These are-
Figure 9: Shortcut system of Wal-Mart value chain.
Suppliers Wal-Mart
Distribution
Center
Wal-Mart
Store
Wal-Mart
Shopper
Vendors are Wal-Mart's
suppliers. They deliver
products to Wal-Mart's
distribution center or
directly to one of the
stores. Wal-Mart is able
to bargain for the lowest
possible price because of
the high volume of sales.
Therefore, Wal-Mart
passes this savings to its
customers.
Customers can
purchase products at
very low prices and
have the ability to
return any item.
After products are
delivered to the
stores, they are
placed on the
appropriate shelf
location for
customers to view.
Store locations are
located throughout
the U.S. in rural and
urban towns.
Once the products are
delivered to the
distribution center,
they are sorted and
placed on trucks to be
delivered tostores.
This allows for less
than 48 hour
deliveries to stores
andincreased
efficiency on trucks
withbackhauls.

12. VALUE CHAIN OF MASSCO KNIT COMPOSIT LTD
Massco knit composit ltd is a peculiar player of the fashion market, whose action oppose to
most of industry representatives. Common industry practice is to focus on design and
branding issues – to concentrate on the core business, but it acts simply as like as other
company of garments, they are fully-integrated: from dye house and knitting factories to
international fashion retail chain.
Figure 10: Flow time analysis of Massco Knit Composit Ltd.
Inbound Logistics
It involves supplier relationships and refers to all the processes/activities involved in
receiving, storing and distributing the raw materials, inputs, components, and parts used in
the production process. These raw materials are sewing thread, fabrics, trims, accessories and
so on.
Operations
Operations are the processes or activities of manufacturing, assembly, packaging,
maintenance of the equipment, and testing of inputs to produce the final product. In this
company, operations are cutting section, sewing section, finishing section. Through this
sections are processing to produce goods.
Outbound Logistics
It relates to storage, processing orders, transport, and distributions of the product to the final
consumer. In this way, total products are found after processing. At this, goods are nicely
present to the customers or buyers.
Marketing and Sales

13. Marketing must make sure that the product is targeted towards the correct customer group.
The marketing mix is used to establish an effective strategy; any competitive advantage is
clearly communicated by the use of the promotional mix. It involves activities like
advertising, promotions, sales force organization, segmentations, and selecting distribution
channels, pricing, and managing customer relationships. In this company has own buyers and
other buyer has come for few prices. But they get few prices in this company. On the way,
this company’s merchandiser attitude is good and full fills the order on the time.These
company customers are H&M, Target, C&A, Zara, Cubus and so on.
Service
All those activities associated with maintaining product performance after the product has
been sold. It involves processes/activities that enhance the value of the product in terms
Order full fills on time, good quality products, timely shipment and so on.
Porter’s Value Chain - Primary Activities: A Summary
PrimaryActivities
Inbound Logistics
- Receipt of inputs (materials)
- Storage
- Stock Control
- Internal Distribution of Inputs
Operations
- Transformation of inputs into final
product
- Use of Labor
- Manufacturing Technologies
Outbound Logistics
- Distribution of finished goods
- Stock Control & Inventory
- Distribution of final product to buyers
Sales & Marketing
- Advertising
- Promotional Activity
- Persuading People to buy
Service - After sales support
Figure 11: Primary activities of Massco group.
On the other hand, Porter (1980, 1985) defines the support activities (see following table) as:
Procurement
This concerns how resources are acquired for a business (e.g. sourcing and negotiating with
materials suppliers). It occurs in many parts of the organization with purpose to support the
main functions to carry out their activities.
Technology Development

14. Activities concerned with managing information processing and the development and
protection of "knowledge" in a business. In addition, it involves technology development to
support R&D, process automation, and product design;
Human Resource Management (HRM)
HRM involves activities in relation to recruitment, training, development, promotion,
incentives, and payment of people working for an organization.
Firm Infrastructure
Firm Infrastructureinvolves the structures and routines of the organization and its
management, planning, accounting, finance, and quality control mechanisms.
Porter’s Value Chain - Secondary Activities: A Summary
SecondaryActivities
Procurement
- Purchasing of Resources
- Purchasing of inputs
Technology Development
- Technology to support primary
activities &
Operations
Infrastructure
- Leadership Structure/Management
- Planning/processes
- Finance
- Information Systems
Human Resource
Management
- Recruitment
- Selection
- Training
- Reward & Motivation
Figure 12: Secondary activities of Massco group.
VALUE CHAIN OF AMERICAN APPAREL LTD
Vertical integration of American Apparel core business has resulted into simplification of
inbound processes – company simply does not need much from the external environment.
Such way of doing things seems a good solution for the company, as it may always be sure
that there could be no problems with suppliers, and the business will operate almost in any
condition of external environment.

15. Figure 13: Primary activities of American Apparel Ltd.
Inbound logistics
Vertical integration of American Apparel core business has resulted into simplification of
inbound processes – company simply does not need much from the external environment.
Such way of doing things seems a good solution for the company, as it may always be sure
that there could be no problems with suppliers, and the business will operate almost in any
condition of external environment.
Operations
All of company’s operations except from international fashion retail, takes place in USA and
that is core part of company’s strategy – they could have production in China with much
lower wages, however being a throughout USA brand is what American Apparel has always
been doing. The tag ―Made in USA‖ is really rare, especially in the fashion industry, so this
issue is the core value-adding factor. Company focuses greatly on the control of its operations
and the quality – that is the consequence of vertical integration, company seeks highest
quality at every stage of production.[6]
Outbound logistics
Company, represented by its major shareholder and CEO claims that vertically integrated
business model allows to design, cut, distribute and sell an item globally in just 7 days.
Moreover, company does not franchise its foreign fashion retail operations, and pursues a
peculiar strategy with its stores. It focuses on the principle of spending relatively low
amounts on store design and refurbishment. For example, in USA American Apparel tends to
choose locations for their stores, with rent is about $200 per square foot – company uses low
amount of investments in their distribution premises. At the same time, company operates
and works a lot on an e-shop that is also a very important distribution channel nowadays, and
share of e-sales in company’s financial statement will definitely be growing in the future.[6]
Marketing & sales
American Apparel has created a powerful brand that has high recognition and trust indicators.
Company also states, that their brand has a cult status worldwide, due to their ―downtown of
LA production‖. Share of international revenues has increased greatly due to expansion that

16. American Apparel has set up. In their marketing they often use provocative methods that
could be considered pretty much helpful for brand development. At the same time, they have
a focus on quality – so the final picture for the client is really very likely: good-looking,
fashionable clothing of highest quality (that is approved by ―Made in USA‖ tag). Also, an
important issue for company’s marketing activities is their environmental friendliness that is
a very important point in the decision-making process in their home market, so it was really
worth making such a point. With their approach American Apparel for the client seems to be
a company producing premium-branded clothing with highest quality and no ―unnecessary‖
value creation points (like stores design). For American Apparel, marketing function is a
cornerstone, that ties together all the peculiarities of the brand and makes it clear for the
customers – why you should buy American Apparel goods.
Service
Service for American Apparel mainly stands for the contact with the client – evidently in the
selling points, American Apparel stores. Based on advanced HRM practices, company has
built the atmosphere of support and has set up fair remuneration, so employees should
provide much higher service level – and this creates additional value to what customers buy.
Company infrastructure
Being a massive vertically integrated company, American Apparel has a focus on location of
production facilities of their goods – being a strong USA brand, each item being tagged with
that, and there are branding implications from that point. One specific thing that depicts
company’s approach to infrastructure was installation of a solar battery on the roof of their
factory. Acting this way company attracts attention to its premises and location of the
premises – you always have to fit with local trends in order to succeed.
Human resource management
American Apparel cares a lot about their employees and offers them a range of extremely
convenient options included in employees’ basic salary. This kind of approach shows that
company wants to establish a relationship with each and every worker, and the result would
be workers extended commitment and higher quality of work done. Basically, people is the
foundation for company’s successful development in recent years, so it is evidently also a
way of creating additional value (from company’s insight it is much more important, than
from customers point of view).
Technology

17. Technology for American Apparel is probably not the most important shape of the business
model, due to business specifics. However, technology is extremely important in production
the system should be working perfectly and the quality of the product should always be on
top level. Quality of goods is definitely plays one of major roles in company’s strategy.
Procurement
Due to the fact that company has internalized its operations greatly throughout vertical
integration process, procurement as a supportive issue that has significant impact on the
process of running business. On the other side, procurement does not have significant effect
on value creation – this supportive function does not imply that.
Conclusion
By subdividing an organization into its key processes or functions, Porter was able to link
classical accounting to strategic capabilities by using value as a core concept, i.e. the ways a
firm can best position itself against its competitors given its relative cost structure, how the
composition of the value chain allows the firm to compete on price, or how this composition
allows the firm to differentiate its products to specific customer segments. The Value Chain
Analysis should be accompanied with a customer segmentation analysis to mix the internal
and external view. A feature or product provides the firm with a differentiating competitive
advantage only if customers are willing to pay for it. Customer value chains need to be
analyzed to determine where value is created.

18. REFFERENCE
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3. http://www.emeraldinsight.com/journals.htm?issn=0025-1747&volume=40&issue
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5. http://www.assignmentpoint.com/business/internship-report-on-evince-textiles-
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15. Figure9:https://www.google.com.bd/search?q=PORTER%27S+VALUE+CHAIN&tb
m=isch&tbo=u&source=univ&sa=X&ei=YK81U
16. Figure10:http://web.ntpu.edu.tw/~jason/120%20MM/reference%201/Porter%27s%20
Five%20Forces.pdf
17. Figure11:http://search.tb.ask.com/search/AJimage.jhtml?searchfor=primary+activities
+of+value+chain+of+an+apparel+industry&p2=^BBQ
18. Figure12:http://search.tb.ask.com/search/AJimage.jhtml?searchfor=secondary+activiti
es+of+value+chain+of+an+apparel+industry
19. Figure13:http://search.tb.ask.com/search/AJimage.jhtml?searchfor=porters+value+ch
ain&p2