Page 142 - F1 - AB Integrated Workbook STUDENT 2018-19
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Chapter 9
Porter’s value chain
4.1 Porter’s value chain
Porter developed his value chain to determine whether and how a firm’s activities
contribute towards its competitive advantage.
The approach involves breaking the firm down into five ‘primary’ and four ‘support’
activities, and then looking at each to see if they give a cost advantage or quality
advantage.
Firm infrastructure
Support activities Technology development
Human resource management
Procurement MARGIN
Inbound Operations Outbound Marketing Service
logistics logistics and sales
Primary activities
Usefulness:
identifies activities that do not add value
looks at relationships between activities
helps understand an organisation’s source of competitive advantage – if any!
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