Chapter 5 Value Chain And SWOT Analysis

VALUE CHAIN AND SWOT
ANALYSIS
Chapter 5

VALUE CHAIN ANALYSIS
It is undertaken to evaluate a company’s value chain elements.
 Value chain analysis helps only in identifying the strengths and weaknesses of each elements of firm’s value chain.
 It can not be used to identify external opportunities and threats.
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SWOT ANALYSIS
It is a situation analysis of the organization.
 It is a groundwork for matching the strategy both to the external market and internal resources.  It is away to analyze a firm’s internal and external situations.
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VALUE CHAIN ANALYSIS
It has been popularized by Michael Porter.
 The value chain provides a disaggregated view of a firm.
 It is a systematic way of viewing the series of activities a firm performs to provide a product to its customer.
 A value chain consists of a firm’s primary and support activities.
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PRIMARY AND SUPPORT ACTIVITIES
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The primary activities are involved with thePhysical creation of the product
 Its distribution and marketing
 The after sales service
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In another way, primary activities includeInbound logistics
 Operations/production
 Outbound logistics
 Marketing and service
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PRIMARY AND SUPPORT ACTIVITIES
Inbound logistics include Receiving inputs
 Storing inputs
 Handling inputs
 In another way, this includes Material handling
 Storing of products in warehouse
 Scheduling of vehicles for transport of products/materials  Return to supplier
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PRIMARY AND SUPPORT ACTIVITIES
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Operations include Machining
 Packaging
 Assembly
 Testing
 Equipment
 Maintenance
 And other activities transforming input into the final products

PRIMARY AND SUPPORT ACTIVITIES
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Marketing includes Advertising
 Sales promotion
 Public relations
 Personal selling
 Sales force
 Selection of distribution channel
 Pricing of products etc

PRIMARY AND SUPPORT ACTIVITIES
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Service includes Repair of machines
 Installation of machinery
 Training to customers (dealers)
 Supply of parts
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