What is the value chain?
Michael, a professor at Harvard Business School? The concept put forward by Porter in 1985, according to Porter,? Every enterprise is a collection of activities in the process of designing, producing, selling, sending and assisting its products. All these activities can be represented by the value chain. ? The value creation of an enterprise consists of a series of activities, which can be divided into two categories: basic activities and auxiliary activities. Basic activities include internal logistics, production and operation, external logistics, marketing and sales, services, etc. Auxiliary activities include procurement, technology development, human resource management and enterprise infrastructure. These different but interrelated production and operation activities constitute a dynamic process of creating value, that is, value chain.
Content composition of value chain
In order to survive and develop, enterprises must create value for their shareholders and other interest groups, including employees, customers, suppliers, regions and related industries. If you put? Enterprise? This? Black box? Open, we can decompose the process of creating value into a series of different but interrelated economic activities, or? Value-added activities, the sum of which constitutes an enterprise? Value chain? .
Any enterprise is a collection of activities carried out in the design, production, sales, delivery and after-sales service of its products. Every management activity is a link in this value chain. The value chain of an enterprise and the way it carries out a single activity reflect the history, strategy, implementation method and main economic situation of the activity itself.
The value-added activities of value chain can be divided into two parts: basic value-added activities and auxiliary value-added activities.
The basic value-added activities of enterprises, that is, in the general sense? Production and operation links? , such as material supply, finished product development, production operation, finished product storage and transportation, marketing, after-sales service, etc. These activities are directly related to the processing and circulation of commodity entities.
Auxiliary value-added activities of enterprises include organizational construction, personnel management, technology development and procurement management. The technology and procurement here are generalized, which can include both productive technology and unproductive development management, such as decision-making technology, information technology and planning technology. Procurement management includes not only the production of raw materials, but also the management of other resources, for example, hiring relevant consulting companies to carry out advertising planning, market forecasting, legal consultation, information system design, long-term strategic planning, etc.
All the links in the value chain are interrelated and influence each other. The management of one link can affect the costs and benefits of other links. For example, if you spend more money on purchasing high-quality raw materials, you can reduce the number of processes, produce fewer defective products and shorten the processing time.
Although every link in the value chain is related to other links, the extent to which a link can influence the value activities of other links is closely related to its position in the value chain. According to the flow procedure of product entities in each link of the value chain, the value activities of enterprises can be divided into? Upstream link? And then what? Downstream link? Two kinds. In the basic value activities of enterprises, material supply, product development and production and operation can be called? Upstream link? ; Finished product storage and transportation, marketing and after-sales service? Downstream link? . The center of upstream economic activities is products, which are closely related to the technical characteristics of products; The center of the downstream link is the customer, and the success or failure mainly depends on the customer characteristics. Whether in the production industry or the service industry, the basic activities of enterprises can be expressed by the value chain, but the specific value composition of different industries is not exactly the same, and the importance of the same link in various industries is not the same. For example, in the agricultural products industry, because the products themselves are relatively simple, the competition is mainly manifested in price competition, and there is generally no need for advertising marketing, and the requirements for after-sales service are not particularly strong. Accordingly, the downstream links of the value chain have relatively little influence on the overall effect of enterprise management; In many industries with high technical requirements, such as industrial machinery industry, after-sales service is often the key to success or failure of competition.
Advantages of value chain
? Value chain? The basic idea of this theory is that there are many enterprises in an enterprise. Value activities? Not every link creates value. The value created by enterprises actually comes from some specific value activities in the enterprise value chain; Do these truly value-creating business activities belong to the enterprise value chain? Strategic connection? . In the final analysis, the advantages of enterprises in competition, especially those that can be maintained for a long time, are the advantages of enterprises in some specific strategic value links of the value chain. The monopoly advantage of the industry comes from the monopoly advantage of some specific links in the industry. Grasping these key links will also grasp the whole value chain. These strategic links that determine the success or failure of enterprise management and benefit can be product development, process design, marketing, information technology, knowledge management and so on. , depending on different industries. In the high-end fashion industry, this strategic link is generally design ability; In the cigarette industry, this strategic link is mainly advertising and public relations strategy (that is, how to deal with the efforts of various governments and consumer organizations to quit smoking); In the catering industry, this strategic link is mainly the location of restaurants. Although, as mentioned above, different industries have different value chains, and the same link has different functions in different industries, for large enterprises, such as multinational companies, the key link in the value chain, namely core competence, can be diffused and transplanted in related industries, thus improving the competitive advantage of enterprises, especially multinational companies. Multinational companies have the scope economy effect of global cross-industry marketing in international marketing activities. This kind of scope economy effect is obtained by multinational companies through the optimal utilization of general elements and resources. This common element can be common production equipment, management experience, marketing skills and research and development capabilities. Because the existence of common elements can be found in almost every link of the value chain, when the key link in the value chain of two industries, that is, the core competence needs the same common elements, multinational companies will spread their core competence in one industry to another related industry, thus transforming the scope economy effect into the scope economy advantage. Therefore, the advanced knowledge, experience and skills acquired by multinational companies in marketing communication activities in one industry can be transferred to other related industries without great additional investment.
The role of value chain
Value chain is ubiquitous in economic activities. There is an industry value chain between upstream and downstream related enterprises, and the relationship between business units within the enterprise constitutes the enterprise value chain, and there are also value chain links among business units within the enterprise. Every value activity in the value chain will have an impact on how much value the enterprise can finally realize. Value chain plays an important role in income, international division of labor and business strategy.
Potter's? Value chain? This theory reveals that the competition among enterprises is not only the competition of a certain link, but the competition of the whole value chain, and the comprehensive competitiveness of the whole value chain determines the competitiveness of enterprises. In Porter's words, the value in consumers' mind consists of a series of specific activities and profits in the material and technology within the enterprise. When you compete with other enterprises, it is actually the competition of many internal activities, not the competition of one activity. ?
Application of value chain
Microsoft and its Windows operating system as a personal computer desktop? A lot of commercial software is developed for this purpose? The core of is usually considered as a typical example of companies and products that drive the value chain. When buying software for personal computers, enterprises spend far more on additional software than on the basic operating system, which is the de facto standard for running these additional software. Other companies must meet Windows standards. In this sense, it can be said that Microsoft controls a value chain. According to a research report by McKinsey & Company, the value of this unique value chain reached $383 billion in 1998. Microsoft's share in this value chain is only 4%, or $654.38+053 billion.