Menu
Click here for instant contact with one of the 12 people who know about this topic

Value chain Michael Porter

certified ManagementGoeroes expert badge
2 mins read

Value chain Michael Porter - The Value chain by Michael Porter is one of the most important and widely used management models for making an internal analysis. Porter developed the Value chain in 1985 for his book Competitive Advantage: Creating and Sustaining Superior Performance. Although Michael Porter's Value chain was developed in the 1980s, it is still very current.

The Value chain helps you to divide up a company, so that it is possible to see for each component whether a competitive advantage can be achieved here. The Michael Porter Value chain can also be used to develop a company-wide strategy. In this case, the Value chain helps you to handle each part of the company separately.

Value chain Porter

Primary activities in the Value chain

The Michael Porter Value chain can be divided into primary and supporting activities. According to Michael Porter, the primary activities consist of:

  • Inbound logistics - receiving, storing and distributing raw materials
  • Operations - converting the raw materials into a product
  • Outgoing logistics - receiving, storing and delivering or sending the end product
  • Marketing and sales - advertising, determining the proposition, price of the product, sales, etc.
  • Service - customer inquiries, repair, training, etc.

Supporting activities in the Value chain

  • Purchasing - the purchase of raw materials or merchandise
  • Technology development - Research and development, ICT (hardware and software)
  • Human Resource Management (HRM) - Personnel Policy, Recruitment & Selection, Training, etc.
  • Infrastructure - general management, planning, finance, accounting, etc.

If you add up the total income of all business units within the Value chain, and subtract the costs, you retain the margin (the operating result).

Use of the Michael Porter Value chain

The Value chain is very useful to use in articles or reports in which you want to analyze the entire business strategy. The Value chain forms the framework that ensures that you do not forget any business units.

Share this article

Related articles

Show more

Popular articles

Show more

Latest Articles

Show more
Direct advice from a management consultant
Rick De Vlieger
Rick De Vlieger
Rp 42.357 pm
Online marketeer
I'm the ONE Who knows about management & online marketing strategy.
Nadine Scheel
Nadine Scheel
Rp 17.467 pm
Social Media Expert
I'm the ONE Social Media Strategist & Expert for Personal Branding - Level Up Your Business
Abdullah Al-shaibi
Abdullah Al-shaibi
Rp 43.667 pm
Advisor
I'm the ONE who can help you
Billie Christelle Igabe
Billie Christelle Igabe
Rp 8.471 pm
#Growth Marketing
I'm the ONE Je suis The ONE, "Business Developer" à votre service !
Vace Selviyan
Vace Selviyan
Rp 15.531 pm
NLP-Coach & -Trainer
I'm the ONE "One ACT of Random Kindness at a time changes the world"