Page 185 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes 2. Support Activities, which whilst they are not directly involved in production, may increase
effectiveness or efficiency (e.g. human resource management). It is rare for a business to
undertake all primary and support activities.
Value Chain Analysis is one way of identifying which activities are best undertaken by a
business and which are best provided by others (out sourced).

10.5.1 Linking Value Chain Analysis to Competitive Advantage

What activities a business undertakes is directly linked to achieving competitive advantage.

Example: A business which wishes to outperform its competitors through differentiating
itself through higher quality will have to perform its value chain activities better than the
opposition. By contrast, a strategy based on seeking cost leadership will require a reduction in
the costs associated with the value chain activities, or a reduction in the total amount of resources
used.

Primary Activities
Primary value chain activities include:
Table 10.1: Primary Value Chain

Primary Activity Description
Inbound logistics All those activities concerned with receiving and storing
externally sourced materials
Operations The manufacture of products and services – the way in which
resource inputs(e.g. materials) are converted to outputs (e.g.
products)
Outbound All those activities associated with getting finished goods and
logistics services to buyers
Marketing and Essentially an information activity – informing buyers and
sales consumers about products and services (benefits, use, price, etc.)
Service All those activities associated with maintaining product
performance after the product has been sold

Support Activities

Support activities include:
Table 10.2: Support Activities

Secondary Activity Description
Procurement This concerns how resources are acquired for a business (e.g.
sourcing and negotiating with materials suppliers)
Human Resource Those activities concerned with recruiting, developing,
Management motivating and rewarding the workforce of a business
Technology Activities concerned with managing information processing and
Development the development and protection of "knowledge" in a business
Infrastructure Concerned with a wide range of support systems and functions
such as finance, planning, quality control and general senior
management

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