1. © 2012 Pearson Education, Inc. publishing Prentice Hall. Note 7 Company Assessment— The Value Chain

2. © 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Note 7-1 - The Value Chain 2

3. © 2012 Pearson Education, Inc. publishing Prentice Hall. The Value Chain  Value chain analysis allows the strategic planner to:  Identify what activities can lead to advantage  Facilitate identification of what activities for a particular firm do lead to advantage 3

4. © 2012 Pearson Education, Inc. publishing Prentice Hall. The Value Chain  Primary activities are concerned with the creation or delivery of a product or service  Inbound logistics  Operations  Outbound logistics  Marketing and sales  Service 4

5. © 2012 Pearson Education, Inc. publishing Prentice Hall. The Value Chain  Support activities are needed to perform the primary activities and contribute to their effectiveness and efficiency  Firm infrastructure  Human resource management  Technology development  Procurement 5

6. © 2012 Pearson Education, Inc. publishing Prentice Hall. The Value Chain  The individual activities of the value chain are strategically relevant because:  Each of them can constitute a cost advantage or differentiation advantage  Each of these activities a company can either win or lose money, depending how effectively and efficiently it performs them compared to the competitors 6

7. © 2012 Pearson Education, Inc. publishing Prentice Hall. The Value Chain  A value chain analyses should answer the following questions:  What are the activities of a company’s value chain?  Which of them are strategically important in the industry?  How well do we perform on the activities?  Which activities generate profits and which cause losses?  Which activities constitute competitive advantages or core competences?  Which activities should be outsourced? 7

8. © 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Note 7-2 - Analysis of the Value Chain of a Pharmaceutical Company 8

9. © 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Note 7-3 - Strategic Priority Analysis (SPA) 9

10. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education, Inc. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall