Aspects of the Value-Chain Analysis to be considered are:
Discuss the two types of Value Chain activities – Primary and Support – and how they help create value by finding both “better” and “different” ways of performing these activities (apply your own organizational and/or SSM company experiences)
– Primary and Support – and how they help create value by finding both “better” and “different” ways of performing these activities (apply your own organizational experiences)
ISCUSS THE TWO TYPES OF VALUE CHAIN ACTIVITIES – PRIMARY AND SUPPORT – AND HOW THEY HELP CREATE VALUE BY FINDING BOTH “BETTER” AND “DIFFERENT” WAYS OF PERFORMING THESE ACTIVITIES (APPLY YOUR OWN ORGANIZATIONAL AND/OR SSM COMPANY EXPERIENCES)
According to Carpenter and Sanders (2008), the value chain can be divided into two different activities, primary, and support. Porter and Millar (1985) state that value-chain activities have nine generic categories (See Figure 1) and that primary activities, which are displayed on the horizontal axis, create the product, marketing, delivery, and support and servicing after the sale. Support activities, displayed on the vertical axis, are the inputs and infrastructure activities that make the primary activities possible. Stabell and Fjeldstad (1998) further explain that “Primary activities are directly involved in creating and bringing value to the customer, whereas support activities enable and improve [emphasis added] the performance of the primary activities” (p. 417).
Figure 1: Value Chain (Porter & Millar, 1985, p. 151)
Porter and Millar (1985) state that the activities that make up the value chain are interdependent and are connected by linkages. These linkages are the interaction with the performance of an activity and its effects on cost or effectiveness of other activities (p. 150).
Carpenter and Sanders (2008) state that using the resource-based view (RBV) of the firm, firms differ in their resources and capabilities, and these account for the performance difference between firms. The value chain is another way firms differentiate themselves to achieve a competitive advantage. Melding all the above information together makes finding better and different ways of performing activities seem the only logical way to create and sustain and competitive advantage.
Regarding the application of the value chain in the StratSim, each group is starting to make different decisions that will affect each subsequent decision for their firm, and if the competition is paying attention, it will affect their decisions too. I am not going to state in this post what type primary and support activities Firm A will make over the next six weeks, but we will be analyzing our and the other firms’ value chains. We will be making decisions that will allow us to perform our activities within the value chain better so that we can develop a dominant design and continue on the path to a sustained competitive advantage (Amit & Zott, 2001).
Amit, R., & Zott, C. (2001). Value creation in e-business. Strategic Management Journal, 22, 493-520.
Carpenter, M. A., & Sanders, W. M. (2008). Strategic management: A dynamic perspective—Integrated StratSim simulation experience. Upper Saddle River, NJ: Pearson Prentice Hall.
Porter, M. E., & Millar, V. E. (1985, July-August). How information gives you competitive advantage. Harvard Business Review, 63(4), 149-160.
Stabell, C. B., & Fjeldstad, Ø. D. (1998). Configuring value for competitive advantage: On chains, shops, and networks. Strategic Management Journal, 19, 413-437.