Question

what are the elements of the company value chain (Micheal Porter) and how do they differ from the elements of an industry value chain? Which approach in your opinion, is better suited to analyzing a company's strengths, weaknesses, and opportunities?

Answer 1

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The elements of the company value chain are product Design, Operations, outbound logistics, marketing, and services. They are also known as the firm value chain. These are also called primary activities and the activities which support it are the materials & equipment, Infrastructure, Human resources, and system solutions.

The company value chain differs from the elements of an Industry value chain because the Industry value chain includes the supplier value chain, firm value chain, Buyer value chain and also Disposal / Recycle value chain. So according to this, we have observed that the firm or company value chain is the part of the Industry value chain and this is because the environment and industry in company functions are the most important elements in identifying the market attractiveness and also in the Industry, the firm operates which will determine the firm strategies.

Therefore the environment which is larger and in which the company is seen to operate is known as Industry Value chain and the company value chain becomes a part of this industry value chain.

This is how we can differentiate between the two.

The approach in my opinion which is better suited to analyze a company's strengths and weaknesses and opportunities is - Matching and converting.

Where matching is used to know or determine the competitive advantage by making a match to strength to opportunities and converting is applied to convert the weakness into strengths and opportunities. And if opportunities are not been converted or cannot be converted then a company should try to minimize them.