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How to use the value chain model to analyze the competitive advantage of an enterprise?
Michael Porter, a famous strategist from Harvard Business School, put forward the "value chain analysis" (as shown below), which divides the internal and external value-adding activities into basic activities and supporting activities, and the basic activities involve production, sales, logistics of incoming materials, logistics of deliveries, and after-sales service of the enterprise. Supporting activities involve personnel, finance, planning, research and development, procurement, etc. Basic and supporting activities constitute the value chain of an enterprise. Different enterprises participate in value activities, not every link to create value, in fact, only some specific value activities to really create value, these real value-creating business activities, is the value chain of the "strategic links". The competitive advantage that an enterprise wants to maintain is actually its advantage in certain specific strategic links of the value chain. The use of value chain analysis to determine core competitiveness requires enterprises to pay close attention to the state of the organization's resources, and requires enterprises to pay special attention to and cultivate important core competitiveness in the key links of the value chain, in order to form and consolidate the enterprise's competitive advantage in the industry. An enterprise's advantage can be derived either from the adjustment of the market scope involved in value activities or from the optimization benefits brought about by the coordination or co-option of the value chain among enterprises.

Consulting Tools

Ansoff Matrix

Case Interview Subdivision

Analysis Tools/Frameworks

ADL Matrix

Andy Grove's

Six Forces Model

Boston Matrix

Benchmarking

Porter's Five Forces Analysis

Model

Porter's Value Chain

Analytical Model

Boston Experience Curve

Porter's Diamond Theory Model

Bain's Profit Pool

Analytical Tools

Porter's Competitive Strategy

Roulette Model

Porter's Competitive Structure in Industry

Analytical Model

Porter's Industry Organization

Model

Five Factors of Change

BCG Rule of Three or Four Matrix

Product/Market Evolution

Matrix

Gap Analysis

Strategy Information System

Strategy Square Model

CSP Model

Innovation Dynamics Model

Quantitative Strategic Planning Matrix

Grand Strategy Matrix

Multipoint Competitive Strategy

DuPont Analysis

Targeted Policies Matrix

Druk's Seven

Sources of Innovation

Dual Core Model

Golden Triangle of Service

Faulkner and Bowman 's

Customer Matrix

Faulkner and Bowman's

Producer Matrix

FRICT Funding Analysis

GE Matrix

Gallup Pathway

Firm-Level Strategic Framework

Advanced SWOT Analysis

Shareholder Value Analysis

Supply and Demand Modeling

Critical Success Factors

Analytical Approach

Job Valuation

Methodological Framework for Planning Corporate Vision

Core Competency Analysis

Models

Watson Wyatt Human

Capital Index

Core Competency Identification

Tools

Environmental Uncertainty Analysis

Strategic Groups in the Industry

Analytical Matrix

Horizontal Value Chain Analysis

Strategic Groups in the Industry

Analysis

IT Value Added Matrix

Competitive Situation Matrix

Fundamental Competitive Strategy

Competitive Strategy Triangle Model

Outline of Competitor Analysis

Value Web Model

Performance Prism Model

Price Sensitivity Test Method

Competitor's Cost Analysis

Competitive Advantage Causality

Model

Competitor Analysis Tools

Value Chain Analysis Methods

Scripting Method

Four-Level Model of Competitive Resources

Value Chain Informatics Management

KJ Method

Card-based Intellectual Stimulation

KT Decision-Making

Expansion Methods Matrix

Stakeholder Analysis

Radar Graph Analysis

Luin's Force Field Analysis

Six Thinking Hats

Profit Pool Analysis

Process Analysis Model

McKinsey's 7S Model

McKinsey's Seven Steps of Analysis

McKinsey's Three-Level Theory

McKinsey Logic Tree Analysis

McKinsey's Seven Steps to Poetry

McKinsey Customer Profitability

Matrix

McKinsey's 5Cs Model

Internal-External Matrix

Internal Factor Evaluation Matrix

Nolan's Stage Model

Kraft Method

Internal Value Chain Analysis

NMN Matrix Analysis Model

PEST Analytical Model

PAEI Management Role Model

PIMS Analysis

Perot's Technological Classification

PESTEL Analytical Model

Enterprise Quality and Vitality Analysis

QFD Method

Enterprise Value Correlation Analysis

Models

Enterprise Competitiveness Nine Force Analysis

Models

Five-Factor Analysis of Corporate Strategy

Human Resource Maturity Model

Economic Analysis of Human Resources

RATER Index

RFM Model

Reading's Learning Model

GREP Model

Talent Model

ROS/ RMS Matrix

3C Strategic Triangle Model

SWOT Analysis Model

Quadruple Chain Model

SERVQUAL Model

SIPOC Model

SCOR Model

Three Dimensional Business Definition

Virtual Value Chain

SFO Model

SCP Analytical Model

Thomson and Strickland

Methodology

V-Matrix

Gyroscopic Model

External Factors Evaluation Matrix

Threat Analysis Matrix

New 7S Principles

Behavioral Anchored Rank Evaluation Approach

New Boston Matrix

Systems Analysis Methodology

System Logic Analysis Methodology

Entity Value Chain

Information Value Chain Model

Strategy Implementation Model

Strategy Clock Model

Strategic Position and Actions

Evaluation Matrix

Strategy Mapping

Organizational Growth Stage Model

Strategic Choice Matrix

Patent Analysis

Management Factor Analysis Model

Strategy Cluster Model

Integrated Strategy Theory

Vertical Value Chain Analysis

Importance-Imperative Model

Knowledge Chain Model

Knowledge Value Chain Model

Knowledge Supply Chain Model

Organizational structure model

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The value chain lists total value, and includes value activities and profits. Value activities are the physically and technologically distinct activities performed by a firm, which are the cornerstone of the firm's ability to create a product of value to the buyer. Profit is the difference between total value and the total cost of engaging in the various value activities.

Value activities are divided into two broad categories: basic activities and supporting activities. Basic activities are the various activities involved in the physical creation of the product and its sale, transfer of buyers and after-sales service. Supporting activities are ancillary to the basic activities and support them by providing purchasing inputs, technology, human resources, and various company-wide functions.