Porter’s Value Chain

ACCA P5 考試： Porter’s Value Chain

Porter’s value chain focuses on the value-added activities that a firm performs rather than its organizational structure.

The Primary Activities

The primary activities of an organisation are related to producing the good or service of the organisation:

Inbound logistics —receiving, handling and storing goods materials and inputs for production;

Operations—converting the inputs into the final product;

Outbound logistics—delivering the product to the customer;

Marketing and sales—informing customers about the product;

After sales service—repairing products, setting up machines etc.

The Secondary Activities

The secondary activities support the primary activities.

Procurement—buying the inputs;

Technology development—product design, improving processes;

Human resource management—recruiting, training, developing and rewarding people;

Firm infrastructure—support activities such as management, finance, etc.

Use of The Value Chain

The value chain is a strategic planning model that can be used by management to analyse the critical success factors of the organisation and to coordinate the activities of the various activities. The linkages between primary and support activities can be clearly understood.

The value chain identifies critical success factors.

It provides a structure for identifying cost drivers for ABC.

It can be used to analyse rivals, for comparison purposes.

Distinctive competencies can be used to enable the organisation to secure a "fit" with the environment.