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Porter’s Value Chain is a management tool that helps organizations to analyze all the steps in their value chain.

Porter’s Value Chain states that a chain of events made of 9 steps occur from the purchase of raw materials to post-sales and any of these steps can be altered to add further value to the final product.

Porter's Value Chain – Primary Activities

Primary Activities

Primary Activities are the ones that have a direct impact on the production, sales, support, and maintenance of the products.

Inbound logistics

Inbound logistics include raw materials and associated warehousing and distribution to internal units. This step puts the onus on a healthy supplier relationship.

Example – Starbucks + 300,000 farmers

Operations

The Operations are activities that transform the raw material into semi-finished or finished goods so that inputs can become outputs. It puts the onus on effective management of all the operational systems.

Example – Tesla manufacturing electric cars

Outbound logistics

The Outbound logistics cover all the activities from the delivery of final products to the customers. It starts from warehousing to transportation to distribution to reach the end customer.

Example – Amazon Prime Air

Marketing and Sales

Marketing and Sales are the activities related to product positioning in the consumer market and creating strong and healthy public relations. It includes strategies to boost product visibility with promotions and advertising.

Example – Burger King

Services

Services are the activities like customer service, exchange, refund, and repair to boost consumer experience

Example – Tesla owns showrooms for good customer experience

Porter's Value Chain – Support Activities

Support Activities

Support Activities are the activities that can improve the efficiency of the primary activities

Infrastructure

Infrastructure includes administrative activities, legal operations, government regulations, planning, general management, finance, accounting, and quality assurance

Technological development

Technological development is useful during research and development and includes automating processes, and designing and developing manufacturing techniques

Example – Tesla developing battery in-house

Human Resources Management

Human Resources Management includes hiring, recruitment, and optimal utilization of human resources by placing the right person on the right job

Example – Ritz empowering staff

Procurement

Procurement are activities related to acquiring fixed assets and raw materials for the company

Example – Tesla procures battery from Panasonic

This video is on Porter’s Value Chain and it has the following sub-topics.

Time Stamps

0:00 What is Porter's Value Chain?
00:21 What is Porter's Value Chain?
01:25 Porter's Value Chain – Primary Activities
01:30 Primary Activities
01:41 Inbound logistics
02:05 Operations
02:21 Outbound logistics
02:37 Marketing and Sales
03:01 Service
03:20 Porter's Value Chain – Support Activities
03:25 Support Activities
03:47 Technological development
04:14 Human Resources Management
04:32 Procurement

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