Questions and Answers
What does the term 'value chain' refer to?
The full lifecycle of a product or process, including material sourcing, production, consumption, and disposal/recycling processes
What is the objective of value chain analysis?
To give business a systematic way to examine the processes involved in delivering value to customers
What are the components of value chain analysis?
Material sourcing, production, consumption, and disposal/recycling processes
What is the focus of value chain management?
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What is the limitation of value chain analysis?
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What is the focus of value chain management?
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What does value chain analysis assess?
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What does the term 'value chain' encompass?
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What is the objective of value chain analysis?
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What are the benefits of value chain analysis?
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Study Notes
Value Chain
- Refers to the series of activities that create value for customers from raw materials to end customers
Value Chain Analysis
- Objective: to identify and evaluate the activities that create value for customers and optimize them to gain a competitive advantage
- Components:
- Inbound logistics
- Operations
- Outbound logistics
- Marketing and sales
- Service
- Assess: the series of activities that create value for customers and identify opportunities to reduce costs, improve quality, and enhance customer satisfaction
Value Chain Management
- Focus: on managing the entire value chain to create value for customers, from raw materials to end customers
- Limitation: assumes a linear sequence of activities, whereas in reality, value chains can be complex and dynamic
Benefits of Value Chain Analysis
- Helps firms to identify areas for cost reduction and improvement
- Enables firms to differentiate themselves from competitors
- Enhances customer satisfaction
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