assignment bpsa 3

8/8/2019 Assignment Bpsa 3

1/4

[BPSA] ASSIGNMENT

1

INDUSTRYANALYSIS

Industry Analysis is amarketassessmenttool designed to provide a business with anidea of the complexity of a particular industry. Industry analysis involves reviewing theeconomic, political and market factors that influence the way the industry develops.Major factors can include the power wielded by suppliers and buyers, the condition ofcompetitors, and the likelihood of new market entrants.

The Value Chain

To better understand the activities through which a firm develops a competitive

advantage and creates shareholder value, it is useful to separate the business system

into a series of value-generating activities referred to as the value chain.The value

chain approach was developed by Michael Porter in the 1980s in his book Competitive

Advantage: Creating and Sustaining Superior Performance.

Value chain analysis describes the activities within and around an organization, andrelates them to an analysis of the competitive strength of the organization. Therefore, it

evaluates which value each particular activity adds to the organizations products orservices. This idea was built upon the insight that an organization is more than arandom compilation of machinery, equipment, people and money. Only if these thingsare arranged into systems and systematic activates it will become possible to producesomething for which customers are willing to pay a price. Porter argues that the ability toperform particular activities and to manage the linkages between these activities is asource of competitive advantage.


2/4

[BPSA] ASSIGNMENT

2

Porter distinguishes between primary activities and support activities. Primary activitiesare directly concerned with the creation or delivery of a product or service. They can begrouped into five main areas: inbound logistics, operations, outbound logistics,marketing and sales, and service. Each of these primary activities is linked to supportactivities which help to improve their effectiveness or efficiency. There are four main

areas of support activities: procurement, technology development (including R&D),human resource management, and infrastructure (systems for planning, finance, quality,information management etc.).

The basic model of Porters Value Chain is as follows:

A typical value chain analysis can be performed in the following steps:

Analysis of own value chain which costs are related to every single activity

Analysis of customers value chains how does our product fit into their value chain

Identification of potential cost advantages in comparison with competitors

Identification of potential value added for the customer how can our product add value to thecustomers value chain (e.g. lower costs or higher performance) where does the customer see suchpotential

Cost Advantage and the Value Chain

A firm may create a cost advantage either by reducing the cost of individual value chainactivities or by reconfiguring the value chain.


3/4


4/4

assignment bpsa 3

Documents