CS_lecture 5(Value Chain_2012).pdf

Competitive Strategy: Value Chain Analysis John Sanders Lecture Format ● Introduction ● Value Chain Model – ?firm configuration of resources capabilities ● Value Chain Analysis ● Strategy and Value Chain Analysis ● Example: Hugo Boss AG ● Conclusions Introduction SBU Metric Value proposition Value Chain Analysis Strategic Group Mapping Porter’s Five Forces Introduction A firm manages many different activities to achieve it outcomes Introduction ●The term value chain describes a way of looking at a business as a chain of activities that transform inputs into outputs that customers value. ●Value chain analysis views the organisation as a sequential process of value-creating activities, and attempts to understand how a business creates customer value by examining the contributions of different activities within the business to that value. Who am I relying on? What do I offer? How do I reach my customers? Value chain model Porter, M.E. (1985). Competitive advantage. New York: Free press Value Chain Analysis Key steps in Value Chain Analysis 1. Start by laying out the industry value chain ● How far upstream or downstream do the industry’s activities extend? ● What are the key value-creating activities at each step in the chain? ● Compare the value chains of rivals in an industry to understand differences in prices and costs. Value Chain Analysis: Configuring activities to create customer value RD Supply chain management Operations Marketing Sales Post-sales service Value Chain Analysis Upstream Value Chains A Company’s Own Value Chain Downstream Value Chains Activities, Costs, Margins of Forward Channel Allies Strategic Partners Internally Performed Activities, Costs, Margins Activities, Costs, Margins of Suppliers Buyer/User Value Chains Value Chain Analysis Value Chain Analysis 2. Next compare your value chain to the industry’s. Fives Forces and Value Chain Analysis Potential Entrants Substitutes Adapted from Porter (1980 and 85) Firm Valu