Organisational behaviour
The value chain
According to Porter (1985), competitive advantage can only be understood by looking at the firm as a whole.
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The value chain vs The value chain (Porter)
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Strategy
The value chain (Porter)
The value chain is a tool for identifying key processes in your business, assessing your firm’s competitive capabilities in each and thereby assessing.
Read articleChoice logic
Use this when.
Use the model to diagnose sources of competitive advantage, understand how activities reinforce one another and decide where to reduce cost or increase customer value.
Use it to determine which activities are most important to success and therefore qualify as key success factors.
Extracted signals
Strengths, limits, and pitfalls.
The value chain
- Analyse each strategically relevant activity for customer value, cost and linkage effects rather than optimising it in isolation.
- Define the customer and unit of analysis, then decompose work far enough to reveal different cost drivers, capabilities or sources of value. Compare performance and linkages with competitors rather than documenting only the internal process.
- Inbound logistics: receiving, handling, storing and scheduling inputs, including supplier and inventory management.
Watch for
- Do not mistake subjective activity ratings or an exhaustive process map for evidence of competitive advantage.
The value chain (Porter)
- Treat support activities as part of every primary activity’s performance and analyse the linkages that create cost or differentiation advantage.
- Inbound logistics: receive, store and distribute inputs.
- Operations: transform inputs into products or delivered services.
Watch for
- Do not repeat the same whole business chain for every segment when infrastructure, people systems and procurement are shared across them.
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Application bridge
Related templates.
Benefits Realization ReportBenefits Realization Report Purpose. Use this report to show which programme benefits were realised during a defined period, which expected benefits were delayed or missed, and which new benefits have emerged. Each entry should trace to the business case and benefits-realisation plan so decision-makers can distinguish delivered value from completed activity. Application. Benefits become meaningfulKnowledge Management PlanKnowledge Management Plan Purpose. Use this plan to connect programme participants with useful knowledge, subject-matter expertise and the information created across components. Effective knowledge management reduces reinvention and duplicate work, helps people find proven answers quickly and reserves scarce expert attention for problems that genuinely require new thinking. Application. Prepare thProcurement Management PlanProcurement Management Plan Purpose. Use this plan to decide what the programme should obtain externally and how each acquisition will move from need to an awarded agreement. It covers facilities, goods, materials and external resources, together with the sourcing, solicitation, evaluation and contractual methods appropriate to each requirement. Application. Prepare the plan early because procuremProgram Benefits Sustainment PlanProgram Benefits Sustainment Plan Purpose. Use this plan to maintain the conditions that allow programme benefits to continue accruing after transition. It turns the handover commitments in the benefits transition plan into enduring operational mechanisms, measures, responsibilities and responses. Application. Treat it as a living document. Customer demand, operating capacity, technology, regulati