Value Chain System
VALUE CHAIN SYSTEM
The value chain concept was created by Michael Porter and explained in his book “Competitive Advantage”, published in 1980. The value chain is a series of activities that create and build value- culminating in the contribution of total value to the organization. Porter used the concept of value chain as a systematic approach to examining the development of an organization’s competitive advantage in the marketplace.
In using the value chain concept, the total activities undertaken by a business are split into Primary Activities and Support Activities. Primary activities relate to inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities include procurement, technology development, human resource management, and firm infrastructure.
INTEL
No doubt, Intel has emerged as the market leader in the design and manufacture of microprocessors, having an almost unbeatable advantage over its competitors. Yet Intel has realized that the best way to retain its market position is to make it easy and efficient for people to do business with the company. Since 1998, Intel has developed and used an e-business strategy to maintain relationships with its customers, employees and suppliers. The company’s goal is to become a 100% ‘e-business enabled’ corporation. In terms of the value chain concept, Intel has made remarkable progress and reaped tangible benefits in the volume of business it does on the Web, as well as created savings of time and money for both itself and its customers. (Pallato, 2001)
Let us analyze Intel’s strategy in terms of the primary value chain activities:
Inbound Logistics
Prior to implementation of its e-business initiative, Intel used the traditional methods of pen, paper and telephone to place and track its supplies and suppliers. Furthermore it ordered supplies only in response to customer orders. Consequently the company lost out on many business opportunities, where it could not
The value chain concept was created by Michael Porter and explained in his book “Competitive Advantage”, published in 1980. The value chain is a series of activities that create and build value- culminating in the contribution of total value to the organization. Porter used the concept of value chain as a systematic approach to examining the development of an organization’s competitive advantage in the marketplace.
In using the value chain concept, the total activities undertaken by a business are split into Primary Activities and Support Activities. Primary activities relate to inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities include procurement, technology development, human resource management, and firm infrastructure.
INTEL
No doubt, Intel has emerged as the market leader in the design and manufacture of microprocessors, having an almost unbeatable advantage over its competitors. Yet Intel has realized that the best way to retain its market position is to make it easy and efficient for people to do business with the company. Since 1998, Intel has developed and used an e-business strategy to maintain relationships with its customers, employees and suppliers. The company’s goal is to become a 100% ‘e-business enabled’ corporation. In terms of the value chain concept, Intel has made remarkable progress and reaped tangible benefits in the volume of business it does on the Web, as well as created savings of time and money for both itself and its customers. (Pallato, 2001)
Let us analyze Intel’s strategy in terms of the primary value chain activities:
Inbound Logistics
Prior to implementation of its e-business initiative, Intel used the traditional methods of pen, paper and telephone to place and track its supplies and suppliers. Furthermore it ordered supplies only in response to customer orders. Consequently the company lost out on many business opportunities, where it could not
References: 1. http://www.termpapergenie.com/intels.html. 2. http://www.termpaperwarehouse.com/essay-on/Value-Chain/76 3. http://www.termpaperwarehouse.com/essay-on/Coca-Cola-Value-Chain/23259 4. http://bizcovering.com/major-companies/nokia/