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Business structure and performance management

Business integration

4.1 Introduction

 Business integration is an important aspect of business structure.

 Rather than focusing on individual parts of the business, the whole process
(from, say, initial order to final delivery and after sales service) should be
considered.

 Two possible frameworks:

– Porter’s value chain model

– The McKinsey 7S model

4.2 Porter’s value chain Firm infrastructure

Support activities Human resource management Margin

Technology development

Procurement

Inbound Outbound Marketing Service
logistics Operations logistics and sales

Primary activities

 Based around an organisation’s activities

 Split into primary activities and support (secondary) activities

 Activities should help to drive margin (profit) and should be aligned

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