The Value Chain and Business strategy - Schain24.Com

The Value Chain and Business strategy

Introduction:

The term value chain consists of a chain of activities that
a firm operating in an industry, which performs in an order to deliver a
valuable product or service for the market and customer.

The Firm level value chain:

A firm value chain is a representation of various processes
involved in producing goods and services starting with raw materials and ending
with delivery of the finished goods to the customer.
-Value chain begins with new product development, which
creates new product or service.
-Marketing generates demand by publicizing the customer
priorities that the products or services will satisfy. Marketing also brings
feedback from customer, while developing new product.  
-Distribution either takes the product to the customer or
brings the customer to the product. Service responds to customer requests
during or after the sale.
-The functioning of the value chain is supported by the
human resources, accounting and Information technology.
Above are the functions to execute the competitive strategy
of a company. These functions play certain roles .Each firm need to develop
their own strategy.  

Value
Value Chain 


Significance of the concept:

The value chain framework has come to the forefront of
Supply Chain Management thought and analysis for strategic planning and
competitive strategy. The value chain concept has been extended beyond
individual firms. It can apply to the whole supply chains. The delivery of some
products and services to the end customer mobilizes different economic factors,
each managing its own supply chain. Synchronized local value chains create an
extended value chain, which can be global also. The larger interconnected
systems are sometimes called “value systems”. A value system includes a firm’s
supplier and their suppliers all the way back, the industry itself, the firm
distribution channels, and the industries’ buyers and even extended to the
buyers of their products and so on.
Conclusion:  
The business functions in a 
Value chain includes research and development, designing of the
products, services or processes, production, marketing and sales ,distribution
and customer service.
Please see the Benali version of the same article in the below mentioned link from the same author:

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