This website uses cookies to ensure you have the best experience. Learn more

Value Chain Essay

1448 words - 6 pages

ARTICLE: Value chain analysis in interfirm relationships: a field study and Interorganizational cost management and relational context.

Introduction
A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of the independent activity's value. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. A ...view middle of the document...

Supply management is a relatively new concept in business. Previously, management theory suggested that the overall efficiency of the technical core or production function could be significantly improved if the core could be isolated or buffered to the greatest extent possible from an often erratic and uncertain external environment. Today, companies are working more closely with their supplier so that they can be more responsive to the changing needs of their customers.
The emergence of tactical decision making such as make-or-buy decision more complicated than the neo-classical economic perspective indicates. The development of cost management techniques that cross boundary between buyers and suppliers is to reduce cost through collaborative efforts. Tactical decisions making consists of choosing among alternatives with an immediate or limited end in view. Some tactical decisions tend to be short-run in nature. However it should be emphasized that short-run decisions often have long-run consequences. For instance, a company is considering producing a component instead of buying it form supplier. The immediate objective may be to lower the costs of making the main product. This tactical decision may be a small part of the overall strategy of establishing a cost leadership position for the firm. Tactical decisions are often small-scale actions that serve a larger purpose.
Body
Both articles were discussed about relation of value chain analysis as a tool to improve supply chain operations by performing benchmark analyses, strategic what-if analyses and cost monitoring. To be more effective of cost management, firms enact interorganizational cost management during product design and the characteristics of the relational context associated to them. The most important and indispensable among firms in business relationships are interfirm relationships and networks. There are four elements required to have for the successful implementation of a supply chain management program. i. trust, ii. long-term relationships, iii. information Sharing and iv. individual strengths of organizations.
Dekker was focused on the use of value chain analysis in buyer-supplier relationships for coordinating supply chain interdependence. VCA is regarded as a core analytical tool of strategic management accounting (SMA). The value chain introduced by Porter (1985) has been analyzed by SMA. The core idea of the analysis is to break up the value chain into strategically relevant segments to better understand the behavior of costs and the sources for more efficient. Identifying supply chain improvements may result benefit and investments from coordination of supply chain activities, the exchanges of sensitive cost information and the division of costs. The role of management accounting also important in interfirm relationships, there are; i. the make-or-buy decision that can lead to the initiation of a partnership, ii. the use of management accounting in the...

Other Papers Like Value Chain

Value Chain Analysis

254 words - 2 pages advantage will try to perform its activities better than competitors would do. If it competes through cost advantage, it will try to perform internal activities at lower costs than competitors would do. When a company is capable of producing goods at lower costs than the market price or to provide superior products, it earns profits. M. Porter introduced the generic value chain model in 1985. Value chain represents all the internal activities a

Aggeko Value Chain Essay

2951 words - 12 pages 1. Introduction Aggreko plc is engaged in the rental of power generation and temperature control equipment. It has gained several successes in its business to become the global leader in the power service industry over 49 years. To find out what factors have created the Aggreko’s successes and in what extent this company can achieve the competitive advantages in its business strategy, value chain analysis might be a suitable tool to offer

Dell Value Chain

756 words - 4 pages collaborative supply chain and an innovative ordering and production system. The result is what Dell likes to refer to as its value chain—a chain that brings value from supplier to the customer and provides Dell with a competitive advantage.

Ups Value Chain

4098 words - 17 pages A Value Chain Management Study at UPS Executive Summary UPS is the world’s largest express carrier and largest package delivery company with over $30 Billion in revenue (2001). Its primary service is small package delivery, which has increasingly become a low margin business, and one with growing competitive pressure. Due to these low margins, efficiency and productivity in operations are paramount to overall financial

Brand Value Chain

2568 words - 11 pages Chain Product Development Bean and ingredient Selection Product Distribution Storefront Take-home products The above is the value chain for Starbucks. The upstream portion of the value chain shows the product development from adding teas and international influences, to the research that took place to develop the VIA instant coffee line. They also search the globe for Fair Trade suppliers of high quality beans. These products are then

Wind Power Value Chain

4457 words - 18 pages An Analysis of Opportunities in the Wind Power Value Chain EA I Energy Alternatives India Foreword These are exciting times for Indian renewable energy, and especially so for solar and wind energy. Investments in renewable energy industry in India have increased from a meager $94.58 million in 2001 to $3.7 billion in 2008, and about $7.2 billion by 2009 - at a CAGR of 72%. A significant part of these investments were in wind energy

Value Chain and Competitive Forces

718 words - 3 pages Value Chain and Competitive Forces ITM 524 - Foundations of Information Technology Management Module 2 – Case 1 Trident University International January 4, 2016 Value Chain and Competitive Forces The value that an organization creates and acquires is referred to as the profit margin. This means that the more value the organization creates the more profitable the it has a chance of becoming. In order for an organization to remain

Chevron (Value Chain + Core Competencies)

1446 words - 6 pages Table of Contents Introduction 4 The Value Chain 4 Operations 5 Outbound logistics 5 Technology 6 Core Competencies 6 Conclusion 7 References 9 Introduction Chevron Corporation is multinational energy organization engaged in every facet of the oil, natural gas and thermal energy industries. Its downstream operations include selling products such as fuels, lubricants and petrochemicals to the global market. Chevron’s success is

Disaster Management in Value Chain

1196 words - 5 pages community based programmes. However, .most of the NGOs do not have the required capacity for managing effective emergency assistance efficiently. It has been explored that most of the NGOs have limited technical expertise and absence of disaster management professionals to do all the work in value chain (need assessment , beneficiary profile, proposal to donor, packaging, procurement, delivery).. International NGOs – Most of the INGOs have a

Human Resource Practice Enhance Value Chain

1398 words - 6 pages How might exemplary human resource practice enhance and strengthen a firm's value chain activities?1. Definition of Value ChainThe value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The organization is split into 'primary activities' and 'support activities.' Primary Activities include: Inbound Logistics, Operations, Outbound

Mapping Social Impact Along the Value Chain

712 words - 3 pages (Strategy Compass GmbH, Value chain analysis by Porter) 1 Key impact points The above diagram illustrates some of the major activities Kiva carries out as an organization in their process of delivering value to their borrowers through collaboration with lenders and field partners.  Kiva’s activities makes economic, social and environmental impacts at many points on their value chain. Below are seven key impacts of Kiva’s work, both

Related Essays

Value Chain Essay

573 words - 3 pages According to the M. Porter Value chain is the chain of activities that a firm operating in specific industry performs in order to deliver a valuable product or service for the market. He introduced concept of value chain in his book "The Competitive Advantage" in 1985. Now this concept is one of the best known and widely applied. Value chain analysis helps to identify a firm's core competencies and distinguish those activities that drive

Value Chain Essay

2828 words - 12 pages VALUE CHAIN – CRITIQUE/FIRM LEVEL ANALYSIS INDIVIDUAL ASSIGNMENT – UNIVERSITY OF BALLARAT CHINTHAKA ARIYAPALA – ID 30100162   Brief Content Topic Page 1. INTRODUCTION...………………………………………………………………………….. 3 2. VALUE CHAIN FRAMEWORK-CRITIQUE…………………………………………………….. 3 3. MAIN ASPECT OF VALUE CHAIN ANALYSIS…………………………………………………. 3 4. PRIMARY ACTIVITIES…………………………………………………………………………………. 4 5. SUPPORT ACTIVITIES

Value Chain Essay

1554 words - 7 pages IT and the Executive: Value Chain Analysis Question: What is a Strategy(1) ? The Oxford English Dictionary defines a strategy as follows: 1: The art of war. 2a: The management of an army or armies in a campaign. 2b: the art of moving troops, ships, aircraft, etc into favourable positions 3: A plan of action or policy in business or politics So let us now ask this question again, and this time

Value Chain Essay 1168 Words

1168 words - 5 pages the variety of training (e.g. fish culture, mushroom culture, sericulture etc.) In a nutshell the value chain of the whole project will be as following: The Value Chain | Input | Activity | Output | Outcome | | | | Initial | Intermediate | Long Term | Marketing and Promotional efforts, Money | Direct Marketing, TVCs, PR, Using Social Media, TV program, Caller tune offers etc. | Public Awareness and Promotion of the Cause | Buzz