Thesis: Cons of Value Analysis

Sample Thesis Paper

Besides certain advantages there are certain disadvantages of Value analysis (Fliesher & Bensoussan 2002). These disadvantages are discussed below:

  1. Porter provided a qualitative analysis for a quantity oriented exercise. That is the reason why the analysis began with identifying the activities that leads to competitive difference and they are significant in identifying the overall cost base of the organization.
  2. In order to mix the internal and external view the entire value chain analysis must go along with a customer segmentation analysis. In this analysis a certain feature or a product provides the firm a competitive advantage but only if the customers of the organization are willing to pay for it.
  3. The Value chain analyses analysis a firm’s position directly with respect to its direct competitors.  An assumption is basically made in this analyses that rivalry drives profitability of the firm.
  4. This model was actually developed to analyze the physical assets of the organization in product oriented environments. However, other authors unlike Porter stressed on services and intangible assets.

In general the concept of value can be explained with an example that if an individual is dying of thirst in a desert than the value of water for that individual is great. Similarly, a person having an ample supply of water considers the value of water to be negative because it is available to him/her. Therefore, value depends on the context and it is basically a subjective experience. Value actually occurs when needs are met through the stipulation of resources, services or products (Robson 1996). Similarly, value is basically an experience and it flows from the recipient of resources that is the customer. The basic examples of value chains are:

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