The Value Chain By Michael E. Porter And Popularized Essay

The Term ‘value chain’ was coined by Michael E. Porter and popularized in his business management book, Competitive advantage: creating and sustaining superior performance. According to Michael E. Porter, the value chain includes the activities within and around a company that creates a product or service. Porter’s value chain constitutes a set of activities that are performed to design, product and market, deliver and support its products. Porter distinguished between; †¢ Primary activities: inbound logistics, operations, outbound logistics, marketing and sales, service in the core value chain creating value. †¢ Support activities: procurement, development, technology, human resource management, firm infrastructure supporting the value creation in the core value chain Value chain analysis is a very helpful tool that is used for working out how greatest possible value can be created for the customers. Any or all of the primary activities that are mentioned above may be vital in development of a company’s competitive advantage. For instance, logistics activities are critical for a provider of distribution services, likewise service activities may be the key focus of a firm offering on-site maintenance contracts for office equipment. It is very important for an organization to understand the activities that add value to its products and services and the activities that do not add any value. Understanding these parameters will help the company map its processes and flows toShow MoreRelatedPorter s Value Chain Of The Petroleum Sector1338 Words   |  6 PagesPorter’s Value Chain in the Petroleum Sector A value chain is a full range of activities, including design, production, marketing and distribution that businesses go through to bring a product or service from conception to delivery. The value chain analysis was popularized by Michael Porter in 1985. 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