Question

Analyse the components of a firm’s value chain, support your answer with reference to an organisational example. Please provide insightful analysis and elaborate more.

Answer 1

Value chain is the dedicated list of activities that are conducted to produce a product or to deliver a service. Value chain accommodates all the activities, from the conception of an idea to delivery of product or service.

Value chain of a business comprises primary and support activities.

• Primary activities: The activities that are directly concerned with the creation of product or delivery of service.
  • Inbound logistics: Concerned with accepting the raw material, storing them in ware house and their distribution among the different production activities
  • Operations: The activities that transform the raw material to final product
  • Outbound logistics: Concerned with the distribution of the final product to the retailers, wholesalers and consumers
  • Marketing & sales: This includes the sales promotions, the distribution channels, the pricing strategy and the advertising so that the market gets fully aware about the product or service.
  • Service: The activities that aim at maintaining the quality and performance of the product and service respectively
• Support activities: The activities that provide support and assistance to the primary activities in the creation of product or delivery of service
  • Procurement: This activity is involved with the ways, the various raw material for the production is procured from suppliers and contractors
  • Technology development: This focuses on the research and development conducted to design the product and service and increase their effectiveness
  • Human resource management: This is involved in managing the critical human capital of the business
  • Firm infrastructure: This basically involves the general management activities like planning, budgeting, financing, legal, etc.