In business administration there are a number of concepts and methodologies that can make a difference in the direction of a company. One of these concepts is the Value Chain. Ready to learn what the Value Chain is and how your business can benefit from it (if you don’t already adopt it, but haven’t realized it)? Then read on:
After All, What Is Value Chain?
Value Chain is a model generated by Professor Michael Porter in the early 1980s that lists the processes that generate value for customers and competitive advantage for companies. The Value Chain is presented graphically and divided into main processes and support processes. Thus, the purpose of the value chain is to identify the process flows within a company and how they contribute to generating value. Now, let’s get to know the value chain processes better and how they impact the company’s results. Just Keep on reading as you will know more options for the same.
Core Value Chain Processes
The main processes of the value chain, also known as Primary Activities, are those that are directly related to the creation of products or services. The main processes of operating a company are five:
- Internal logistics
- Production or operation
- External logistics
- Sales and Marketing
- Services
Next, we will delve into each of them:
Internal Logistics
The internal logistics or intralogistics , consists of transactions that take place within the company, either in stock, on dispatch, distribution centers etc. Thus, the objective is to be efficient throughout the operation, with gains in productivity and reduction of logistical costs.
Production Or Operation
These primary processes are responsible for transforming the raw material into the final product. It is at that moment that the company’s core activity is carried out.
Logistics
The logistics external brings together the processes that make the product into the customer’s hands. Some of the activities of these processes deal with storage, fleet management, routing, product distribution and much more.
Marketing And Sales
The Marketing and Sales departments of the companies are fundamental to attract new opportunities and conclude sales, generating revenue for the business. The importance of Marketing for companies is enormous, for example, promoting products and generating demand for the sales area.
Sales processes are the last effort to convince the customer. The processes can vary a lot according to the company’s business model, but in general, it is at that moment that we seek to refute any and all impediments that the customer has in relation to the product.
In other words, it is in the marketing and sales process that the company attracts the customer’s attention and performs strategies to generate sales.
Services
Service processes focus on customer retention activities, that is, seeking to maintain their consumers and increase the value they see in the company. In other words, after sales:
We can list the following areas of the company that operate in services:
- Deployment / Onboarding
- Customer service
- Customer Support (as well as Help Desk, Customer Service and Ombudsman )
- Customer Success
- And others
Value Chain Support Processes
The support processes contribute to the execution of the main processes of the value chain and the management of the company as a whole.
