Thesis: Value Chain Strategy Levels

Sample Thesis Paper

Like all business processes, the value chain can also be analyzed on all three fundamental levels of operation; namely: strategic, tactical and operational (Ilyas, Banwet, & Shankar, 2006). When analyzing the value chain on a strategic level, the key areas to consider include those such as those that are based on long term decisions (Ilyas, Banwet, & Shankar, 2006). The long term decisions are those that have a direct impact on the competitive advantage of the organization. Because of this reason, they tend to directly address the design of the value chain rather than addressing areas pertaining to exactly how it functions.

However, areas addressed in the strategic perspective of the value chain do include those that pertain to the degree of integration that value chain members exercise in their functioning (Ilyas, Banwet, & Shankar, 2006). It therefore comes as no surprise that the development of the value chain level in the strategic context requires participation by figureheads from all sections of the value chain.

When considering the value chain in a tactical perspective, short term decisions based on forecasts are made. These decisions influence areas of logistical relevance as well as those that deal with the last few processing phases of the product as it goes through production (Ilyas, Banwet, & Shankar, 2006).

Furthermore, while the tactical level considers the value chain in the context of the short term decisions the scope of which can be expected to span no more than a week or two at best, the operational level of the value chain deals with decisions that are to be taken on a per-day basis. It is imperative to highlight at this point that a firm may also choose to develop strategies for its value chain that address the tactical level of the value chain’s functioning through pre-established tactical decisions (Ilyas, Banwet, & Shankar, 2006). In such cases, ascertaining the exact level of the value chain is often a task for which the result is generally circumstantial.

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