Essay On Internal Value Chain

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A company’s internal value chain includes all the physical and technological activities within the company that add value to the product. The key to evaluating a company’s internal value chain is to understand the activities that give the company a competitive advantage, and then pinpoint and exploit those advantages better than other companies in the industry. This analysis is done in four steps:
(i) Identify the value chain activities – To identify the value chain activities, the following tasks are to be performed; - Look for discrete activities, which create value in different ways. They will include different costs, different cost drivers, separable assets, and different personnel involved, for example, contrasting product design activities with advertising activities. - Identify structural, procedural, and operational activities. Most companies emphasize operational activities, but proponents of value chain analysis state that focus is too narrow and only deals with the short run and will not be able to give the company an overall competitive advantage.
(ii) Determine which activities are strategic – To determine which activities are strategic, a company must identify which product characteristics are valued by existing customers. A company should then find characteristics that it can exploit, and …show more content…

The study revealed that the value chain analysis enables companies’ executives to control cost drivers better than the competitors and thus creating above average performance in operational efficiency, profitability, market share, customers’ satisfaction, innovations, quality, and assets utilization. There is the need to also conduct a similar study in other countries as ours to validate whether environmental differences and respondent characteristics could cause a major difference in the researcher

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