Business Strategy
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Details
Textbook:
Pages : 323;
Paperback;
210 X 275 mm approx.
Workbook:
Pages :
321; Paperback;
210 X 275 mm approx
Pricing
Textbook Price: Rs. 750 ;
Workbook Price: Rs. 700;
Available only in INDIA
Detail Table of Contents
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The Value Chain and Competitive Scope : Chapter 9
SUMMARY:
To create and sustain competitive advantage, it is essential to analyze and understand how various value activities interact. Value activities can be classified into two categories -- primary activities and support activities. Primary activities can be classified into four categories -- research and development, production, marketing and sales, and service. Support activities include materials management, human resource management, and firm infrastructure.
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A firm influences the buyer’s performance by influencing its value chain. It does so by providing direct inputs, that is, products and services, to the customer. It also influences the buyer indirectly through its logistical system, sales force, applications engineering group, and order entry system. A firm creates value when it creates competitive advantage for its buyer. The competitive advantage can be created in the form of lowering the buyer’s cost or raising the buyer’s performance. Value creation has to be accompanied by value communication and value capture. The relationship between value creation and value capture is influenced by the forces of industry structure such as the relative bargaining powers of buyers and suppliers. A firm that has a competitive advantage in the marketplace is able to create and capture value. Gaining sustainable competitive advantage is the main objective of many firms.
Competitive scope influences the competitive advantage by shaping the structure and economics of the value chain. It has different dimensions such as segment scope, vertical scope, geographic scope, and industry scope. Coalitions help broaden the scope of operations without broadening the firm. Further, the basis for defining relevant business unit boundaries is provided by the relationship between competitive scope and the value chain.
There is a reciprocal relationship between value chain configuration and industry structure. The value chain can also be used for designing the departmental structure of a firm.
