Porters Value Chain Flashcards
What is it?
Porter describes the organisation as a “value-creating system”, where the value chain creates a birds eye view of the company.
Each element must be balanced correctly in order to get a high margin as you can only do the next one without the one before it being done right.
Primary Activities
Primary activities are those directly related with the input of materials through to the after sales service of the finished goods.
Inbound logistics
Those activities involved with the physical receipt and storage of inputs, including warehousing, transport and stock control.
Inbound logistics - TFT
Buyers
Operations
The conversion of inputs into finished goods in the factory, including assembly and packaging.
Operations - TFT
Our blenders and our production department
Outbound logistics
The safe storage and final distribution of the product to customers.
Outbound logistics - TFT
We try to run a relatively JIT inventory system and we outsource distribution to an external entity.
Marketing and sales
The advertising and promotion of products
TFT uses tradition methods of marketing
Service
Includes customer support and after-sales services
Service - TFT
30 day credit terms, potential quality guarentees?
Support Activities
These are the functions that improve the efficiency and effectiveness of the primary activities.
Firm Infrastructure
General management, legal, finance and accounting
Firm infrastructure - TFT
The fact the company is family run, the management team and the make-up of buildings etc.
Technology Department
R&D, Design
