The document discusses value chain management (VCM), which is a strategic tool that analyzes a business's activities and their contribution to customer value. It describes primary and support activities in a value chain like inbound logistics, operations, marketing, and procurement. Functional strategies are developed to improve each activity's ability to add value. Total quality management and customer responsiveness are important for value chain analysis, which examines strengths and weaknesses across the chain.

2. VALUE CHAIN
• coordinated series or sequence of functional
activities necessary to transform inputs into finished
goods or services customers value and want to buy

3. PRIMARY ACTIVITIES
OF VALUE CHAIN
Inbound Logistics - arranging the inbound movement
of materials, parts, and/or finished inventory from
suppliers to manufacturing or assembly plants,
warehouses, or retail stores

4. PRIMARY ACTIVITIES
OF VALUE CHAIN
Operations - concerned with managing the process
that converts inputs (in the forms of raw materials,
labor, and energy) into outputs (in the form of goods
and/or services)

5. PRIMARY ACTIVITIES
OF VALUE CHAIN
Outbound Logistics - is the process related to the
storage and movement of the final product and the
related information flows from the end of the
production line to the end user

6. PRIMARY ACTIVITIES
OF VALUE CHAIN
Marketing and Sales - selling a product or service
and processes for creating, communicating, delivering,
and exchanging offerings that have value for
customers, clients, partners, and society at large.

7. PRIMARY ACTIVITIES
OF VALUE CHAIN
Service - includes all the activities required to keep the
product/service working effectively for the buyer after it
is sold and delivered.

8. SUPPORT ACTIVITIES
OF VALUE CHAIN
Procurement - the acquisition of goods, services or
works from an outside external source
Human Resources Management - consists of all
activities involved in recruiting, hiring, training,
developing, compensating and (if necessary)
dismissing or laying off personnel.

9. SUPPORT ACTIVITIES
OF VALUE CHAIN
Technological Development - pertains to the
equipment, hardware, software, procedures and
technical knowledge brought to bear in the firm's
transformation of inputs into outputs.
Firm Infrastructure - consists of activities such as
accounting, legal, finance, control, public relations,
quality assurance and general (strategic)
management.

10. VALUE CHAIN
MANAGEMENT (VCM)
Value chain management (VCM) is a strategic
business analysis tool used for the seamless
integration and collaboration of value chain
components and resources. It is development of a set
of functional-level strategies that support a company’s
business-level strategy and strengthen its competitive
advantage

11. VALUE CHAIN
MANAGEMENT (VCM)
VCM was introduced in the mid-1980s by Michael
Porter, a business strategy authority and longtime
Harvard Business School professor. VCM has evolved
into a universally applied business management
strategy, and is a powerful strategic planning tool that
extends from organizations to distribution and supply
networks.

12. VCM COMPONENTS
- Integrated chain strategy, planning and
scheduling
- An efficient supply chain
- Full and interdependent chain resource
management and optimization
- Integrated customer insight data and information

13. FUNCTIONAL STRATEGIES
FOR COMPETITIVE
ADVANTAGE

14. FUNCTIONAL-LEVEL
STRATEGY
A plan of action to improve the ability of each of an
organization’s departments to performs its task-specific
activities in ways that add value to an organization’s
goods and services

15. FUNCTIONAL ACTIVITIES
AND VALUE CHAIN

16. PRODUCT
DEVELOPMENT
Engineering and scientific research activities involved
in innovating new or improved products that add value
to a product
-Marketing function’s task is to persuade
customers a product meets their needs and convince
them to buy it

17. MATERIALS
MANAGEMENT
FUNCTION
Controls the movement of physical materials from the
procurement of inputs through production and into
distribution and delivery to the customer

18. PRODUCTION
FUNCTION
Responsible for the creation, assembly or provision of
a good or service, for transforming inputs into outputs

19. SALES FUNCTION
Plays a crucial role in locating customers and then
informing and persuading them to buy the company’s
products

20. CUSTOMER SERVICE
FUNCTION
Provides after sales service and support
Can create a perception of superior value by solving
customer problems and supporting customers

21. IMPROVING
RESPONSIVENESS TO
CUSTOMERS
Good value-chain management requires marketing
managers to focus on defining the company business
in terms of customer needs/wants
What the customer wants?
1. A lower price to a higher price
2. High-quality products
3. Quick service and good after-sales service
4. Products with many useful or valuable
features
5. Products that are tailored to their unique
needs

22. IMPROVING QUALITY
An organization able to provide, for the same price, a
product of higher quality than a competitor’s product is
serving customers better
Higher product quality can increase efficiency

23. TOTAL QUALITY
MANAGEMENT
Focuses on improving the quality of an
organization’s products and stresses that all of
an organization’s value-chain activities should
be directed toward this goal

24. STEPS TO SUCCESSFUL
TQM IMPLEMENTATION
1. Build organizational commitment to quality
2. Focus on the customer
3. Find ways to measure quality
4. Set goals and create incentives
5. Solicit input from employees
6. Identify defects and trace to source.
7. Introduce just-in-time (JIT) inventory systems.
8. Work closely with suppliers.
9. Design for ease of production.
10. Break down barriers between functions.

26. VALUE CHAIN
ANALYSIS
Focuses on how a business creates customer value by examining
contributions of different internal activities to that value
Divides a business into a set of activities within the business
• Starts with inputs a firm receives
• Finishes with firm’s products or services and after-sales
service to customers
Allows for better identification of a firm’s strengths and
weaknesses since the business is viewed as a process

27. SWOT ANALYSIS
SWOT analysis (alternatively SWOT matrix) is an
acronym for strengths, weaknesses, opportunities, and
threats—and is a structured planning method that
evaluates those four elements of a project or business
venture

28. INTERNAL ANALYSIS
Making Meaningful Comparisons

29. REFERENCES
• Contemporary Management 5th ed - Gareth Jones & Jennifer
George
• Techopedia Inc..
• https://www.techopedia.com/definition/23858/value-chain-
management-vcm
• Michael Porter and Value Chain
• https://en.wikipedia.org/wiki/Value_chain