is the total amount (i.e. total revenue) that buyers are willing to pay for a firm’s product.
value
Necessarily processing, converting,
improving or adding value to a particular
product (from its original state) thereby giving more appeal, utility, or value to a new
product that promises a level of satisfaction to prospective clients or customer.
Value
Creation
kind of service rendered by
the firm that is being paid for by the clients.
Service of value
doing or rendering
the service itself
Value creation process
is concentrating on the activities starting with raw materials till the conversion into final goods or services.
developed by Dr. Michael Porter
Value Chain
- Process involved in converting a product fromraw material to its finished, saleable and
consumable stage. - Way of organizing the activities of a business so that each activity adds value (value added activity) or productivity to the total operation of the business.
- Sum total of the supply and distribution chain.
Value Chain
Analysis
These are actions that are directly
involved in the creation and distribution of goods and services.
- Inbound Logistics
- Operations
- Outbound Logistics
- Marketing and Sales
- Service
Primary Activities
These are actions that are indirectly involved in the evolution of a product, but instead provides important underlying support for primary activities.
- Firm Infrastructure
- Human Resource Management
- Technology Development
- Procurement
Support Activities
Primary Activites
Receiving, storing, and distributing raw materials, components, and other production inputs. This includes inventory management, warehousing, and managing supplier relationships.
Inbound
Logistic
Primary Activities
All activities are involved in transforming
raw materials (inputs) into the final
product (outputs). This includes manufacturing, assembly, machining, testing,
packaging, and equipment maintenance
Operation
Primary Activities
Refers to the activities involve in collecting, storing, and distributing the finished product from the company in the buyers
Outbound Logistics
Primary Activities
Identification of customers needs and generation of sales. Refers to the acitivites that help a company communicate, promote, and deliver its products/services to customers.
Marketing & Sales
Primary Activites
Involves how a company maintais the value if its product/services after purchased
Service
helps make the primary activites more efficient. when you increase the efficency of any of the least one of the five primary activites. these support activites are generally denoted as overhead costs on a company’s income statement.
- Infrastructure
- Human Resource (HR) Management
- Technological Development
- Procurement
Support Activities
Support Activites
Includes company systems and the composition of its management teams, such as planning, accounting, finance, and quality control.
Infrastructure
Support Activities
Involves hiring and retaining employees who will fulfill the firm’s business strategy and help design, market, and sell the product.
Human Resources (HR) management
Support Activities
Used at a firm’s research and development (R&D) stage, such as designing manufacturing techniques and automating processes
Technological Development
Support Activites
Concerns about how a company obtains raw materials
Procurement
is a collection of uniques qualities and attributes of a business or an organization the enables it to outperform its competitors, make customers choose its offerings over competing product/services, and win a more significant market share.
Competitive Advantage
CA
- is a strategy aiming to establish a
competitive advantage by having the
lowest cost of operation in the industry.
Ex. Walmart, Jollibee etc.
Cost Leadership
CA
- is able to offer products or services that are
unique in some way, and that customers
perceive as being of higher value than those
of its competitors.
Ex. Apple, Starbucks, Nike etc.
Differentiation
