Porter's value chain consists of five primary activities - inbound logistics, operations, outbound logistics, marketing and sales, and service - as well as four supporting activities - procurement, human resource management, technology development, and infrastructure. The primary activities are directly involved in bringing a product or service from conception to delivery, while the supporting activities provide inputs or infrastructure to assist the primary activities.
Download as DOCX, PDF, TXT or read online on Scribd
0 ratings0% found this document useful (0 votes)
137 views
Raw Materials: Inbound Logistics
Porter's value chain consists of five primary activities - inbound logistics, operations, outbound logistics, marketing and sales, and service - as well as four supporting activities - procurement, human resource management, technology development, and infrastructure. The primary activities are directly involved in bringing a product or service from conception to delivery, while the supporting activities provide inputs or infrastructure to assist the primary activities.
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4
Porter’s value chain involves five primary activities: inbound
logistics, operations, outbound logistics, marketing and sales, and
service. Support activities are illustrated in a vertical column over all of the primary activities. These are procurement, human resources, technology development, and firm infrastructure.
Inbound Logistics
Inbound logistics include the receiving, warehousing
and inventory control of a company's raw materials. This also covers all relationships with suppliers. For example, for an e-commerce company, inbound logistics would be the receiving and storing products from a manufacturer that it plans to sell. Operations
Operations include procedures for converting raw
materials into a finished product or service. This includes changing all inputs to ready them as outputs. In the above e-commerce example, this would include adding labels or branding or packaging several products as a bundle to add value to the product. Outbound Logistics
All activities to distribute a final product to a consumer
are considered outbound logistics. This includes delivery of the product but also includes storage and distribution systems and can be external or internal. For the e-commerce company above, this includes storing products for shipping and the actual shipping of said products. Marketing and Sales
Strategies to enhance visibility and target appropriate
customers—such as advertising, promotion, and pricing—are included in marketing and sales. Basically, this is all activities that help convince a consumer to purchase a company’s product or service. Continuing with the above example, an e-commerce company may run ads on Instagram or build an email list for email marketing. Services
This includes activities to maintain products and
enhance consumer experience—customer service, maintenance, repair, refund, and exchange. For an e- commerce company, this could include repairs or replacements, or warranty. Porter's Value Chain Secondary Activities Procurement
Procurement is the acquisition of inputs, or resources,
for the firm. This is how a company obtains raw materials, thus, it includes finding and negotiating prices with suppliers and vendors. This relates heavily to the inbound logistics primary activity, where an e- commerce company would look to procure materials or goods for resale. Human Resource Management
Hiring and retaining employees who will fulfill
business strategy, as well as help design, market, and sell the product. Overall, managing employees is useful for all primary activities, where employees and effective hiring are needed for marketing, logistics, and operations, among others. Infrastructure
Infrastructure covers a company's support
systems and the functions that allow it to maintain operations. This includes all accounting, legal, and administrative functions. A solid infrastructure is necessary for all primary functions. Technological Development
Technological development is used during
research and development and can include designing and developing manufacturing techniques and automating processes. This includes equipment, hardware, software, procedures, and technical knowledge. Overall, a business working to reduce technology costs, such as shifting from a hardware storage system to the cloud, is technological development.