DİLA TEKERSEDA CANPOLAT

 The definition of the value, value chain and value chain analysis.  The definition of the value chain management.  The goals of value chain management.  The requirements of the successful value chain management.  The obstacles of the value chain management.  The benefits of value chain management in business life.

VALUE  The extent to which a good or service perceived by its customers meet his/her needs or wants. THE VALUE CHAIN  Concentrating on the activities starting with raw materials till the conversion into final goods or services that customers value and want to buy.

VCA is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation.

THE GOAL.. To recognize, which activities are the most valuable (i.e. are the source of cost or differentiation advantage) to the firm and which ones could be improved to provide competitive advantage. The firm that competes through differentiation advantage will try to perform its activities better than competitors would do. If it competes through cost advantage, it will try to perform internal activities at lower costs than competitors would do. When a company is capable of producing goods at lower costs than the market price or to provide superior products, it earns profits.

Value chain analysis should be the identification of the following components: Key short- and medium-term end-market opportunities in the target value chains. Factors constraining the maximization of these opportunities Upgrading strategies to address these constraints and maximize opportunities. Private-sector, public-sector and civil society entities to partner with to achieve these upgrading strategies. Recommendations of how to support these value chain upgrading strategies in a way.

M. Porter introduced the generic value chain model in Value chain represents all the internal activities a firm engages in to produce goods and services

COMPETITIVE ADVANTAGES TYPE COST ADVANTAGEDIFFERENTIATION ADVANTAGE When organizations try to compete on costs and want to understand the sources of their cost advantage or disadvantage and what factors drive those costs. The firms that strive to create superior products or services Identify the firm’s primary and support activities. Identify the customers’ value-creating activities. Establish the relative importance of each activity in the total cost of the product. Evaluate the differentiation strategies for improving customer value. Identify cost drivers for each activity. Identify the best sustainable differentiation. Identify links between activities. Identify opportunities for reducing costs.

The process of “managing” the entire sequence of integrated activities and information about product flows along the entire value chain.

To create a value chain strategy that fully integrates all members into a seamless chain that meets and exceeds customers ’ needs and creates the highest value for the customer.

VALUE CHAIN STRATEGY Organizational Culture and Attitudes Organizational Process Coordination and Collaboration Technology Investment EmployeesLeadership

OBSTACLES Cultural Attitudes Required Capabilities People Organizational Barriers

 Organizational barriers Refusal or reluctance to share information Reluctance to shake up the status quo Security issues  Cultural attitudes Lack of trust and too much trust Fear of loss of decision-making power  Required capabilities Lacking or failing to develop the requisite value chain management skills  People Lacking commitment to do whatever it takes Refusing to be flexible in meeting the demands of a changing situation Not being motivated to perform at a high level Lack of trained managers to lead value chain initiatives

BENEFITS OF VALUE CHAIN MANAGEMENT Improved Logistics Improved Product Development Enhanced Customer Order Management Improved Procurement

An example video of value chain for agriculture

What is the benefit of a value chain approach to retail customer? How companies reach to the differentiation in a competitive advantage? Did you face with any developable situation about value chain management in your internships? Or ( How does your organization create a value?)