A value chain study examines how a company’s internal operations contribute to its competitive advantage. Value chain analysis identifies the behaviours and procedures that differentiate a company from its competitors.
We’ll determine your competitive edge when we analyse your company’s value chain. Firms choose from cost advantage or differentiation advantage. A cost advantage strategy aims to make you the market’s cheapest provider. Low-cost companies have efficient operations and use cheap materials and resources to reduce their product’s price. To get a competitive edge, you may utilize a differentiation strategy to offer a unique or specialised product or service. The organisation must invest time and resources in innovation, research, and development. An effective differentiation strategy allows a corporation to charge a premium.
Value chain analysis requires identifying primary and auxiliary functions. You will know where you spend the most money, where your organisation can improve, and where your competitors can exceed you. In Primary Functions, we evaluate Inbound logistics (supplier locations and delivery costs), Operations (warehousing, machinery, and assembly line expenses), Outbound logistics includes shipping, warehouse, distributor, and order processing, Marketing and sales comprise advertising, promotional, reach, and cost-per-acquisition and Services include repair expenses, training costs, and product modification frequency. Auxiliary functions, on the other hand, assist primary activities in succeeding. And here we look at the Firm Infrastructure, Human Resource Management, Technology Development, and Procurement.
Assessing value chains can take months. Steps we take for creating a value chain analysis are as follows.
Determine the Company’s Primary and Auxiliary Functions
Primary and auxiliary functions comprise the value chain and they include every phase in manufacturing a product or service, from raw material to finished product.
Assess Activity Value and Cost
Our value chain analysis team analyse how each operation benefits customers and the business overall and compares the action to your competitive advantage to see if it helps.
Examine Competitor Value Chains
Competitive benchmarking can help you understand your peers’ value chains by comparing your organisation to a competitor’s. The practise serves three purposes. Strategic benchmarking is used to compare business models and strategies, Process benchmarking is used to compare business and operational processes, and Performance benchmarking is used to compare business outcomes based on a set of measures.
Know How Customers Perceive Value
Customer perception is the most significant factor in determining a company’s competitive edge, therefore we assist companies with customer surveys and analyse qualitative or quantitative data for value chain analysis.
Recognize Opportunity to Acquire a Competitive Advantage
Once the value chain analysis is complete, key stakeholders will know where the organisation thrives and where operational improvements may be made. The value chain analysis shows firms how to change their activities and processes to maximise customer value and profit margins.