Michael Porter's value chain Flashcards
what is Porter’s value chain?
A strategic tool to map out internal activities that add value to your customers
what is the value chain the set of?
all activities an organization performs to create margin
what can the value chain help a business do?
understand the activities within your business that create value
what are the two types of activities?
- primary
- support
what are the primary activities?
-Inbound logistics
-Operations
-Outbound logistics
-Marketing and sales
-service
what are the support activities?
-procurement
-human resource management
-technology development
-firm infrastructure
what are inbound logistics? (primary)
the process of orchestrating the receipt of inputs and then storing and distributing them internally
what are operations? (primary)
turning inputs into outputs
what are outbound logistics? (primary)
deliver your products to your customer once operations have produced them
what is marketing and sales? (primary)
responsible for ensuring that your market knows about your product and wants to buy it (advertising, pricing, channel selection etc.)
what is service? (primary)
activities that occur after you make the sale
what is the purpose of service?
to maintain or grow the value your product or service after you have sold it e.g customer service
what is procurement? (secondary)
the process of purchasing the inputs you need
what does procurement involve?
finding new suppliers and negotiating the best price
what is human resource management? (secondary)
involves hiring, training, rewarding, employee well-being and retaining good employees
