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1. CONCEPT OF VALUE CHAIN
&
CORE COMPETENCY
Presented By:-
Vijay

2. What is a value chain?
 Porter’s definition includes all activities to design, produce,
market, deliver, and support the product/service.
 The value chain is concentrating on the activities starting
with raw materials till the conversion into final goods or
services.
 Two categories:
Primary Activities (operations, distribution, sales)
Support Activities (R&D, Human Resources)

3. TYPES OF VALUE CHAIN:
• Value Chain is categorized into types based on the type of
organizations.
• Manufacturing based.
• Service based.
• Both manufacturing and service based.

4. What is value chain analysis?
• Used to identify sources of competitive advantage
• Specifically:
– Opportunities to secure cost advantages
– Opportunities to create product/service differentiation
• Includes the value-creating activities of all industry participants

5. TYPES OF FIRM ACTIVITIES
• Primary activities:
Those that are involved in the creation,
sale and transfer of products (including
after-sales service)
Inbound logistics
Operations
Outbound logistics
Sales and marketing
Service and support
• Support Activities:
Those that merely support the primary
activities
Human resources
(general and admin.)
Tech. development
Procurement

6. USES OF VALUE CHAIN ANALYSIS:-
• The sources of the competitive advantage of a firm can be seen from its discrete
activities and how they interact with one another.
• The value chain is a tool for systematically examining the activities of a firm and
how they interact with one another and affect each other’s cost and performance.
• A firm gains a competitive advantage by performing these activities better or at
lower cost than competitors.
• Helps you to stay out of the “No Profit Zone”
• Presents opportunities for integration

7. APPLYING THE VALUE CHAIN TO AN INDUSTRY
• The value chains of the different firms within an industry vary
from one another.
• In fact, the differences in the value chains among the different
industry players provide the source of competitive advantages
between these players.

8. (A MANUFACTURING BASED
COMPANY)

9. Value Chain & Value System
Inboud
Logistis Operation
s
Marketing Servic
e
Outboud
Logistics
Suppliers , Contractors
SAP , VCM
SAP , CRM - DMS
Strategic Alliances
Transporters, Convoy
Drivers Association
Dealer Network, Marketing
Research Firms, Vehicle
Financing
Regional Warehouses,
Dealer Workshops,
Distributors, TASS

10. CORE COMPETENCY

11. A core competency is a concept in management theory introduced by,
C. K. Prahalad and Gary Hamel. It can be defined as "a harmonized
combination of multiple resources and skills that distinguish a firm in
the marketplace".
Introduction:-

12. DEFINITION:-
A narrowly defined field or task at which a company excels. A firm's core
competencies are difficult for its competitors to mimic, allowing the
company to differentiate itself. Most core competencies will be applicable
to a wide range of business activities, transcending product and market
borders.

13. Types of Competencies:-
Core Competencies - Internal capability that is critical to the success of business, to be
possesses by all individuals
Technical/Professional/Functional Competencies - Specific knowledge & skills
required to be effective in a job
Behavioral competencies - Motives, traits & attributes that shape behaviour & reflect
“how” one applies one’s knowledge & skills in order to achieve results
Threshold competencies - Characteristics required by a jobholder to perform a job
effectively
Differentiating competencies - Characteristics which differentiate superior performers
from average performers

14. Competency Characteristics:-
i. Leadership Competencies
(i) Decisiveness,
(ii) Strategic Orientation,
(iii) Development of People,
(iv) Team Leadership
ii. Interpersonal Competencies
(i) Respect for client,
(ii) Listening skills,
(iii) Oral communication skills,
(iv) Written communication skills,
(v) Leadership skills,
(vi) Negotiation skills,