Quick Answer: Which Is A Supporting Activity In A Value Chain?

What is Porter’s value chain used for?

Porter’s Value Chain is a useful strategic management tool.

It works by breaking an organization’s activities down into strategically relevant pieces, so that you can see a fuller picture of the cost drivers and sources of differentiation, and then make changes appropriately..

What are the types of value chain?

2.6. 2. Types of Value Chain GovernanceTypes of Value Chain Governance. … Market. … Modular. … Relational. … Captive. … Hierarchial. … Footnotes.

What is the main difference between a supply chain and a value chain?

The value chain is a process in which a company adds value to its raw materials to produce products eventually sold to consumers. The supply chain represents all the steps required to get the product to the customer.

Is a supporting activity in Michael Porter’s value chain?

Porter’s value chain involves five primary activities: inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities are illustrated in a vertical column over all of the primary activities. These are procurement, human resources, technology development, and firm infrastructure.

What is value chain example?

Value Chain Analysis Example Value chain analysis allows businesses to examine their activities and find competitive opportunities. For example, McDonald’s mission is to provide customers with low-priced food items. … Below is an example of a value chain analysis for McDonald’s and it’s cost leadership strategy.

How do you use value chain?

To gain cost advantage a firm has to go through 5 analysis steps:Identify the firm’s primary and support activities. … Establish the relative importance of each activity in the total cost of the product. … Identify cost drivers for each activity. … Identify links between activities. … Identify opportunities for reducing costs.

Which of the following is an example of a supporting activity in a value chain?

Sales and service would be examples of supporting activities in Porter’s value chain model. Accounting functions like accounts receivables would be an example of a supporting activity in Porter’s value chain model.

What are the four support activities to a value chain?

Then, he further breaks those down into four activities that help support primary activities. The primary activities of Michael Porter’s value chain are inbound logistics, operations, outbound logistics, marketing and sales, and service.

What is the value chain framework?

The Value Chain framework of Michael Porter is a model that helps to analyze specific activities through which firms can create value and competitive advantage. Inbound Logistics. Includes receiving, storing, inventory control, transportation scheduling. Operations.

What is value chain management and why is it important?

Proper VCM is key to optimizing business operations and maximizing profit. Companies can optimize value for themselves, their vendors and their end customers when they effectively manage the flow of production and sales from inbound logistics to operations, outbound logistics, marketing and sales and service.

What is Porter’s five forces used for?

Porter’s Five Forces Analysis is an important tool for understanding the forces that shape competition within an industry. It is also useful for helping you to adjust your strategy to suit your competitive environment, and to improve your potential profit.

How does Porter’s five forces define strategy?

To define strategy, analyze your firm in conjunction with each of Porter’s Five Forces.Threats of new entry. Consider how easily others could enter your market and threaten your company’s position. … Threat of substitution. … Bargaining power of suppliers. … Bargaining power of buyers. … Competitive rivalries.