• Twitter
  • LinkedIn
(503) 212-0687 | hello@cascadeinsights.com
Cascade Insights
  • Market Research Services
    • B2B Customer Experience Research
      • Buyer Personas
      • Buyer’s Journey Research
      • Key Buying Criteria Research
      • Jobs-To-Be-Done Research
      • User Personas
      • Customer Satisfaction Research
    • B2B Product/Service Research
      • Market Opportunity Research
      • Concept Testing
      • Go-To-Market Research
    • B2B Marketing Enablement Research
      • Data-Driven Marketing Research
      • Message Testing
      • Brand Research
      • Thought Leadership Services
      • Partner Enablement
    • B2B Sales Enablement Research
      • Competitive Landscape Analysis
      • Win-Loss Research
      • Churn Analysis
      • Channel Research
  • Marketing Services
    • Marketing Strategy
    • Messaging
    • Content Marketing
    • Sales Enablement
  • Insights and Perspectives
    • B2B Market Research Blog
    • B2B Marketing Blog
    • B2B Resources
  • About Us
    • Our Story
    • Our Clients
    • Client Testimonials
    • Careers
    • Ethics Policy
    • Privacy Policy
  • Contact Us
  • Search
  • Menu Menu

The “Competitive Intel” Episode 27 Transcript – Value Chain Analysis

April 2, 2013/in Blog Posts /by cascade
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
  • Share by Mail

It is a basic truism that producing customer value in excess of your cost to provide it creates profit. Michael Porter helps unpack the deeper mechanics of this process with the value chain analysis framework in his book, Competitive Advantage: Creating and Sustaining Superior Performance. In theory, every step of a company’s activity should add value, as a contribution to the larger whole, and analysis of those steps provides insight into profitability.

Main Activities that Comprise the Value Chain

Porter’s framework begins by breaking up the work done by a company (or an industry) into five primary activities, with the premise that value is generated within and between these activities:

  • Inbound logistics refers to the tasks and systems to get raw materials or other inputs from suppliers; value can be added by effectively handling matters such as purchasing, transportation, warehousing, and inventory control.
  • • Operations is the activity to transform those inputs into the finished product, which can be improved through plant layout, production control, automation, etc.
  • Outbound logistics concerns getting the finished product to the customer, with opportunities for efficiencies in areas such as order fulfillment, how the product is stored and distributed, and how waste is controlled.
  • Marketing and sales ensures that customers are aware of your product and helps compel them to buy it; value opportunities include advertising and differentiation within a given market segment.
  • Services enhance the product’s value through offerings such as installation, post-sales support, service plans, training, and so on.

Support Activities Where Innovation Can Bolster Value

Porter suggests that, through innovative management and execution, value can be generated from activities that are—at first glance—merely overhead, or “the cost of doing business.” For example:

  • Procurement activities can help obtain the highest-quality goods possible for the lowest possible cost. 
  • Technology development can improve processes for greater efficiency. 
  • Human resource management can attract, retain, and develop employees to the firm’s overall advantage. 
  • Firm infrastructure improves profitability through legal, accounting, and competitive intelligence strategy. 

The Value-Chain Analysis Framework in Action

Even companies that don’t seem to conform to Porter’s rather manufacturing-centric model, the activities he names can be matched to analogous ones in almost any sector or market segment, to support the following basic analysis approach:

  • Map the generic activities to company-specific ones to identify strengths and weaknesses in each. 
  • Identify potential improvements that could increase the way customer value is generated by each activity. 
  • Evaluate opportunities and form strategies based on plausibility, potential benefit, cost, and risk. 

By Sean Campbell
By Scott Swigart

Get in touch

"*" indicates required fields

Name
Cascade Insights will never share your information with third parties. View our privacy policy.
This field is for validation purposes and should be left unchanged.
  • Bio
  • Latest Posts
cascade

cascade

cascade

Latest posts by cascade (see all)

  • Read Like An Analyst: Data Dilemmas, Startups & Standouts - October 20, 2015
  • 7 Trade Show Competitive Intelligence Tips: B2B Market Research podcast - May 11, 2015
  • We will be Hacked: Adjusting to the New Normal for Enterprise Security… - January 16, 2015
Tags: competitive intelligence
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
  • Share by Mail
You might also like
How Good Researchers Give Bad NewsThe “Competitive Intel” Episode 9 Transcript – Reverse Engineering a Competitor Customer List
How Good Researchers Give Bad NewsThe “Competitive Intel” Episode 11 Transcript – Books every Competitive Intelligence professional should own
How Good Researchers Give Bad NewsAnnual Investigative Reporters & Editors Conference
How Good Researchers Give Bad NewsThe “Competitive Intel” Episode 6 Transcript – Win / Loss for the Rest of Us
How Good Researchers Give Bad NewsThe “Competitive Intel” Episode 20 Transcript – What is the Competitor’s Pricing?
How Predictive Analytics Turn Data into Insights – Interview with Author Thomas Miller
How Good Researchers Give Bad NewsHow Good Researchers Give Bad News
How Good Researchers Give Bad NewsB2B Market Research Ethics: The 4 Identities – Respondent, Firm, Client, Study: B2B Market Research podcast

GET IN TOUCH

hello@cascadeinsights.com

(503) 898-0004

WHAT WE DO

Market Research Services
Marketing Services
Subscribeto RSS Feed

Blog Categories

  • B2B Buyer Persona Research
  • B2B Channel Market Research
  • B2B Churn Analysis
  • B2B Competitive Landscape Analysis
  • B2B Customer Experience Research
  • B2B Customer Journey Mapping
  • B2B Go-To-Market Research
  • B2B Market Opportunity Research
  • B2B Market Research Blog
  • B2B Market Segmentation Research
  • B2B Marketing Blog
    • Uncategorized
  • B2B Messaging
  • B2B New Product Launch Research
  • B2B Thought Leadership
  • B2B Usability Testing
  • Brand Research
  • Concept Testing
  • Content Marketing
  • Customer Satisfaction Research
  • Data-Driven Marketing Research
  • Jobs-To-Be-Done
  • Key Buying Criteria
  • Marketing Enablement
  • Marketing Strategy
  • Message Testing Research
  • Partner Enablement
  • Product/Service Research
  • Sales Enablement Marketing
  • Sales Enablement Research
  • User Personas
  • Videos
  • Win/Loss Analysis

Written by

cascade

RECENT POSTS

  1. The “Competitive Intel” Episode 1 Transcript – CES and Trade Show Intelligence
  2. The “Competitive Intel” Episode 10 Transcript – Don’t fetch sticks: fetch answers: Orienting CI Efforts around KIQ’s
  3. The “Competitive Intel” Episode 18 Transcript – Human Intelligence – Part I
  4. The “Competitive Intel” Episode 26 Transcript – Benchmarking and Competitive Intelligence

Connect With Us

503.212.0687

hello@cascadeinsights.com

  • LinkedIn
  • Twitter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

B2B Market Research

  • Customer Experience Research
  • — Buyer Persona Research
  • — Buyer's Journey Research
  • — Key Buying Criteria Research
  • — Jobs-To-Be-Done Research
  • — User Personas
  • — Customer Satisfaction Research

  • B2B Product/Service Research
  • — Market Opportunity Research
  • — Concept Testing
  • — Go-To-Market Research

  • Marketing Enablement Research
  • — B2B Data-Driven Marketing Research
  • — Message Testing
  • — Brand Research
  • — Thought Leadership
  • — Partner Enablement

  • Sales Enablement Research
  • — Competitive Landscape Analysis
  • — Win Loss Analysis
  • — Churn Analysis
  • — Channel Research

B2B Marketing

  • — B2B Marketing Strategy
  • — B2B Messaging Services
  • — B2B Content Marketing
  • — B2B Sales Enablement

About Us

  • — Our Story
  • — Our Clients
  • — Client Testimonials
  • — Careers
  • — Ethics Policy
  • — Privacy Policy

Blogs

  • — B2B Market Research Blog
  • — B2B Marketing Blog
  • — Cascade Insights Blog
Cascade Insights is proud to be a member of the Inc. 5000.
Return of the Expanding Bookshelf Part 1:Return of the Expanding Bookshelf Part 2:
Scroll to top