Week 4: Clear- The Value Chain
Our text, as well as video stream with Michael Porter, explained the Value Chain in clear and easily understandable terms. An additional website to visit for a quick look at The Value Chain is QuickMBA under Strategic Management, NetMBA offers the same information. This is a process in which a product or service is created and carried through the appropriate channels where it is delivered to the customers.
The five basic links in the Value chain begin with the Inbound logistics. This is the place where the materials are gathered from the suppliers. Operations is the making of the actual product or service to be sold. Outbound logistics is the transfer of those products/services to the retailers for distribution. The 4th link is Marketing and sales. This is an important step in which the product is promoted and priced. The 5th link is Support. There are many areas that support come into play in a business to verify that the customer is receiving quality merchandise.
As stated in Information Systems, there are four secondary components in the Value Chain: Firm Infrastructure, HR management, Technology/Research and development, and Procurement. All of these components deal specifically with the business itself, how it is run, who is hired and through what process that employment takes shape, product design, and purchasing.
It is important for the business to remember that the Value Chain is constructed for the business as a whole, not just for departmental units or the corporate offices. In order to maintain a lucrative business, the entire business must remain a unit, or the chain of operations is broken.
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