Thesis: Analysis of Value Chain

Sample Thesis Paper

Source: Porter 1998

Michael Porter is known as the brain child of the value chain management and his interpretation of this model is widely used by organizations in today’s world. The actual idea of value chain is based on the process view of organizations. It’s basically an idea of seeing a product based or a service oriented organization as a system which is made up of different sub systems and each of them involves inputs, transformations processes and outputs. Transformation processes, inputs and outputs involve certain factors like the acquisition and consumptions of resources which include labour, money, land, buildings, administration, materials and management (Rowe, Mason, & Dickel 1993). The entire process of the value chain determines the costs of the organization and it affects the profits.

The process of converting outputs into inputs is considered to be a very important process for different organization because at that point cost can be reduced if processes are managed effectively and efficiently. These activities of converting inputs into outputs are classified either as primary activities or support activities (Porter 1998). These primary and support activities according to Michael Porter (1985) are discussed below:

Primary Activities

Michael Porter (1985) identified the primary activities of a value chain (Porter 1998). These primary activities are discussed below:

  1. 1. Inbound Logistics Relationships with different suppliers and all the activities that are required to receive, store and disseminate inputs are included in Inbound Logistics. 
  2. 2. Operations – This phase is basically the transformational phase in which all the activities are required to transform inputs into outputs.
  3. 3. Outbound Logistics – All the variables that are required for collecting, storing and distributing the output are included in this phase.
  4. 4. Marketing and sales – The process of promotion and facilitating the buyers for purchasing the product and services.
  5. 5. Services – It includes after sales services and all those activities are included in this phase that are required to keep the product or service working efficiently for the buyer of the product.

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