Managing the Value Chain

Chase, R. B., Jacobs, F. R., Aquilano, N.J. Operations management for competitive advantage (11th ed). New York: McGraw Hill/Irwin.

Russell, R. S., & Taylor III, B. W. (2011). Operations Management: Creating Value along the Supply Chain 7th edition. Retrieved November 18, 2011, from Wiley.com: http://bcs.wiley.com/he-bcs/Books?action=index&itemId=0470525908&bcsId=5869

In order for a firm to create competitive advantage, it needs to create a set of activites that can deliver value to the specific product and services it offers to its customers. To start talking about my life as a “value chain”, I may need to compare it to a specific product”. This is going to take precedence both in my personal life and professional life.

The value chain is one of the critical elements of a company’s strategy in today’s competitive world, because company’s profit depends on how the successful and efficient it runs its operations and how the end product appeals to the customers at a price that covers all the expenses of the company.

Effective value chain as a competitive advantage can contribute significantly to the prosperity of a firm in the competitive arena, but it can cause dire situations if not operated properly (Guy, 2011). However, there are conflicts among companies as to how stakeholders think they gain competitive advantage. Porter (1996) suggests: A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at lower cost or do both.

The value chain is one of the critical elements of a company’s strategy in today’s competitive world, because company’s profit depends on how the successful and efficient it runs its operations and how the end product appeals to the customers at a price that covers all the expenses of the company.

|Offers low cost, shopping convenience and desirable tenant mix |Unenclosed malls yield higher cost during winter season e.g. snow|

Keane (2008) stated to design, manufacture, promote, offer and facilitate its product or services, all organization engages in some activities. All of these activities of an organization are shown through the use of value chain process. The manner in which organization performs its varying activities along with the firm’s value chain mirrors the organization’s background, strategy along with the way in which the organization executes its strategy. Ponte (2008) stated that the analysis of value chain of an organization is used to develop the organization’s competitive strategies along with formulation the connected and interconnectedness between all the organizational activities that formulate value. Francis, Simons, and Bourlakis (2008) stated that value chain analysis is a helpful tool as an organization looks to attain competitive advantage. Furthermore, Rieple and Singh (2010) stated that a value chain is a useful tool in conceptualizing the varying activities

2. Analyze ECCO’s global value chain. How well does this configuration match the drivers in the industry?

Today’s world competition is very strong in every kind of businesses. Every organisations must provide high quality products or services in order to survive, however their competitors also providing the same or comparable products or services. An important way to an organisation to get an edge over its competitors is to provide extra service to satisfy and delight their customers, which can retain them and also gain new customers. Therefore the achievement of customer satisfaction must be a major objective in all organisations.

Customer satisfaction and service quality are the two important components that direct anyone’s attention in every concept related to marketing, services, etc. (Spreng and Mackoy, 2006). In today’s competitive era, the success lies in

The value chain approach was developed by Michael Porter in the 1980s in his book “Competitive Advantage: Creating and Sustaining Superior Performance” (Porter, 1985). The concept of value added, in the form of the value chain, can be utilised to develop an organisation’s sustainable competitive advantage in the business arena of the 21st C. All organisations

Brown, S., Lamming, R., Bessant, J., & Jone, P. (2005). Strategic Operations Management. Burlington, MA: Elsevier.

“Competitive Advantage introduces the concept of the value chain, a general Framework for thinking strategically about the activities involved in any business and assessing their relative cost and role in differentiation”. Michael Porter, (1985).

Value chain analysis describes the activities within and around an organization, and relates them to an analysis of the competitive strength of the organization. Therefore, it evaluates which value each particular activity adds to the organizations products or services. This idea was built upon the insight that an organization is more than a random compilation of machinery, equipment, people, and money (Tallon, 2011). Only if these things are arranged into systems and systematic activates it will become possible to produce something for which customers are willing to pay a price. Porter argues that the ability to perform particular activities and to manage the linkages between these activities is a source of competitive advantage. Porter distinguishes between primary activities and support activities (Tallon, 2011). Primary activities are directly concerned with the creation or delivery of a product or service (Mullins & Syam, 2014). CCCC can be grouped into five main areas: inbound logistics, operations, outbound logistics, marketing and sales, and service. Each of these primary activities is linked to support activities which help to improve the effectiveness or efficiency for CCCC products and services. CCCC has four main areas of support activities: procurement, technology development including R&D, human resource management, and infrastructure systems for planning, finance, quality, information management etc.