Value Chain Analysis Value, Value Chain, Value Chain System, Component of Value Chain, Importance and usage of Value Chain, Primary and Secondary activities in Value Chain, Conclusion.

1. Value Chain Analysis
Course Title: Construction Economics and Finance
Program: M.Tch, Construction Technology and Management (CTM)
Department of Civil Engineering, National Institute of Technology Warangal
Presented By: M. Zaman Amir
Date:10/10/2018

2. Outline:
Introduction of Value Chain
 Value Chain System
Why Value Chain Analysis?
Value Chain Analysis
Component in Value chain
Conclusion

3. Introduction of Value Chain
Developer: Michael Porter (1995) Suggested the VCA,
Harvard Professor
Value: is the total amount that buyers are willing to pay for
products or services.
How to create value?
Improving the product:
More appeal
More Utility/ increase functionality
Reducing cost

4. Value Chain System
Value Chain System: is a series of related activities that a firm
operating in a specific industry, in order to deliver valuable
products or services.

5. Value Chain System
Supply Chain:
A supply chain is the network of all the individuals,
organizations, resources, activities and technology
involved in the creation and sale of a product, from the
delivery of source materials from the supplier to the
manufacturer.
Set of activities involved before the creation or
production of a product or the kind of services to be
rendered by the business firm to the public at large, or
the specific market it wants to serve.

6. Value Chain System
Distribution Chain:
Parties involved in moving the products from the
confines or perimeters of business producing the
product ( downstream activities).
Covers all the other parties with direct and indirect
roles in moving or causing the transfer of the product
from its origin to various places or countries and all
the way to final consumption or user stage

7. Definition of Value Chain Analysis
Value Chain Analysis
Value Chain Analysis is a systematic process in which a firm
identifies and analyzes its primary and secondary activities,
which add value to final product in order to reduce the cost
and increase differentiation.

8. Why Value Chain Analysis
Increase the competitiveness of the company
(To create the Competitive Advantages)
Cost Advantage
Differentiation Advantage
Reduce Cost
Improve Market Share
Survival of the company
Bottom Line! Improve the overall profitability of the
company

9. Why Value Chain Analysis
Cost Advantage:
This approach is uses, when organizations try to compete on
cost and want to understand the source of their cost
advantage and disadvantages, what factors drive the cost.
Differentiation Advantage:
If the business entity strive to create superior products or
services then the differentiation approach is the right ones.

10. Activities (components) in Value Chain

11. Primary Activities
Operations in the business organization where most of the
value creation efforts are made or done.

12. Secondary Activities

13. Conclusion
Value chain analysis a powerful systematic approach which
can help us:
Explore the opportunities
Think in a creative way
Maximizing the efficiency
Reducing cost
Creating the competitive advantages
Improving the profitability