LECTUREVALUECHAINANALYSIS.ppt

M15EFACFS Lecture 7 Value Chain Analysis Objectives: Explain the concept of a value chain To link notion of Value Chain to Strategic Capability/Resources and Competences Use a value chain framework to identify strengths and weakness To explain the notion of “Value” and link this to gaining competitive and financial advantage To identify the components of the Value Chain To explain the relevance of “Cost Drivers” To recognise the importance of the wider “Value System” or the “Value Network” Link with “Strategic Capability”: Last week we looked at how to analyse: Resources Competences – the ability to carry out activities: How resources are deployed Value Chain Analysis helps with: Identification of competences/core competences Both Competence to undertake separate value activities and ability to manage linkages between these The Value Chain “The value chain concept can be helpful in understanding how value is created and lost. The value chain describes the activities within and around an organisation which together create a product or service. “ Johnson and Scholes,2002, p.160 Value Chain and Value Network Can help managers: To diagnose strategic capability To understand how value is created or lost in terms of the activities undertaken “The value chain describes the activities within and around an organisation which together create a product or service” JSW,2005,PG136 Strengths Strengths can arise from resources competences linkages between resources and/or competences Sustained competitive advantage arises when the strengths are valuable, rare, non-imitable and organised VRIO framework Link with notion of Competitive and Financial Advantage: Gained by identifying/satisfying customer needs better than competitors whilst making a satisfactory profit ie: Giving better VALUE - from customer perspective Value: Relationship between benefits provided as perceived by customer and price paid So use Value Chain to Analyse activities to see ho