This PPT slide, part of the 16-slide Value Chain Analysis PowerPoint presentation, presents an evolution of the Value Chain concept, originally developed by Michael Porter. It contrasts the traditional internal focus of Value Chain Analysis with a newer, more external perspective advocated by Shank and Govindarajan. The traditional model emphasizes internal activities, categorized into primary and support functions, such as inbound logistics, operations, and marketing/sales. This framework helps organizations understand how their internal processes contribute to value creation.

The newer approach shifts attention to the industry Value Chain, which is described as a "value delivery system." This perspective broadens the analysis to include interactions with external players, highlighting how a firm's activities affect and are influenced by customers and other stakeholders. It emphasizes the importance of understanding the entire ecosystem in which a business operates.

The slide notes that this holistic view allows for the identification of cost drivers at each stage of the industry Value Chain. By doing so, organizations can pinpoint areas where they might gain efficiencies or uncover new opportunities for value creation. This external focus is crucial for companies looking to adapt to changing market conditions and customer expectations.

For potential customers, this slide underscores the importance of evolving from a purely internal analysis to one that considers external dynamics. It suggests that a comprehensive understanding of both internal capabilities and external influences is essential for strategic decision-making and long-term success.

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Value Chain Analysis Value Creation Value Chain Sales Logistics