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Unit 6: Organisational Appraisal: Internal Assessment 2

Outbound Logistics Notes

These activities are associated with collecting, storing, physically distributing the finished
products to the customers. They include finished goods warehousing, material handling and
delivery, vehicle operation, order processing and scheduling.
Marketing and Sales

These activities are associated with purchase of finished goods by the customers and the
inducement used to get them buy the products of the company. They include advertising,
promotion, sales force, channel selection, channel relations and pricing.

Figure 6.2: Value Chain Analysis

Infrastructure

Support Activities Human Resource Management Margin

Technology Development
Procurement

Inbound Logistics Operations Outbond Logistics Marketing and Sales Services Margin

Primary Activities

Services

This includes all activities associated with enhancing and maintaining the value of the product.
Installation, repair, training, parts supply and product adjustment are some of the activities that
come under services.

Support Activities

Procurement

Activities associated with purchasing and providing raw materials, supplies and other consumable
items as well as machinery, laboratory equipment, office equipment etc.
Porter refers to procurement as a secondary activity, although many purchasing gurus would
argue that it is (at least partly) a primary activity. Included are such activities as purchasing raw
materials, servicing, supplies, negotiating contracts with suppliers, securing building leases
and so on.

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