What is the value chain strategy?

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With such a large number of companies and businesses operating around the world today, the competition has become much fiercer and more challenging than at any other time. However, this is not an obstacle for not starting and building new businesses that seek a place within the consumption needs of the world population.

To this end, one of the most important concepts that must be managed to carry out any business-type project is what is known as Value chain.

What is the value chain?

The value chain is a strategic tool used to study the different activities carried out and carried out by a certain business organization.l, esto con la finalidad de que se puedan detectar sus fuentes de competitive advantage y de esta manera, poder generar un cierto valor al producto final.

From this dynamic, we can find that the La cadena de valor de una compañía está formada por todas sus actividades generadas que conllevan value added.or, as well as by the margins that these activities can contribute. Finally, the value chain is made up of strategic activities that want to increase the value and competitive advantage of a business organization.

How does the value chain operate within the operation of a company?

The value that is generated as a result of business activities works as follows: In the case of manufacturing industries, they create value when they transform raw materials into products of necessity for the population.

Desde luego, el valor agregado ya se encuentra en el producto final fabricado, dado que las materias primas sin procesar no sirven a las persons para su consumo diario.

Por ello, una compañía de retail ofrece una gran cantidad de productos que contienen un alto valor agregado por ser ya procesados, valor que aumenta al otorgar todos estos elementos al client en un único lugar, un espacio que ha sido brindado por el establecimiento de venta para que las personas puedan obtener todo lo que necesitan, lo que implica un costo adicional que además es un valor agregado al producto final, y por el cual el cliente terminará pagando para seguir obteniendo sus necesidades básicas de consumo, a través de posts ya procesados ​​y en un solo sitio de venta.

How is the competitive advantage of one company generated over another?

The competitive advantage of one company over another occurs when it manages to increase its margin, which can be achieved by reducing costs or also increasing sales. The margin is what is known as the difference that is generated between the total value and the collective cost of carrying out and carrying out activities of value for a business organization.

Value activities

To carry out its function, The value chain has fundamental supporting activities, which can be divided into two main parts: primary activities and secondary activities. Next, we are going to observe the main characteristics of each of these strategic methods that increase competitive advantage, and as such, the added value of a company.

Primary activities

The primary activities are constituted from the methods of physical creation of the products, as well as their sales procedure and the after-sales service that said operation implies.. It is worth mentioning that these, in turn, can be differentiated into sub-activities. Mainly, within the value chain model, five types of primary activities can be clearly differentiated, which are the following:

• Internal logistics: It is the set of operations for the reception, storage and distribution of raw materials, which is very important to ensure that setbacks or eventualities of any kind are not generated that affect the production or distribution line of any commercial entity.
• Operations: Once the required raw materials are available, this type of activity refers to the ability to process these items to transform them into the final product. Therefore, it is a fundamental step to guarantee the production that the commercial entity will have.
• External logistics: If internal logistics refers to the maneuvers to guarantee the possession and assortment of the raw materials with which the final product has been made, external logistics, on the other hand, has to do with this same methodology, but applied to external processes, that is, when the product leaves the production center and is delivered to wholesalers, distributors or even end consumers.
• Marketing and sales: This type of activity, as its name might indicate, is essential for the product to become known to the consumer population.
• Service: This type of activity can be associated both with after-sales service and with everything related to information and maintenance that may include the purchase of a product. It is about guaranteeing the loyalty of customers by providing a product that already in their hands includes certain important guarantees, such as guaranteeing the return in case of damage or imperfections, or the provision of advice in the event of any eventuality such as failure in delivery or support to install the product, etc. All these guarantees aim to maintain and enhance the final value of the product, thus substantially preserving the level of consumer satisfaction.

Secondary or support activities

It is essential to remember that in order for the primary activities to be carried out efficiently and smoothly, they are in turn supported by the so-called secondary activities of the value chain. These processes are carried out as follows:

• Organizational infrastructure: It is made up of all those activities that provide sustainability and that maintain the basic operation of any company, that is, activities such as planning, accounting, management and finance.
• Human resources management: As its name indicates, this type of support activity has to do with the maintenance and conservation of personnel, that is, it is about the search, hiring and motivation of the personnel of the employees who work in the company. It is essential to pay attention to this element, since the human resources of a company are one of its most fundamental structures and that can establish its long-term success.
• Technology development, research and development: For every company to continue operating with the greatest efficiency and providing the best and most innovative products to all its customers, technological development is vital to stay at the forefront within the range of products and / or services it offers, which ultimately, They will always give you a quality image with which you can always differentiate yourself from your competitors.
• Purchases: This factor has to do with the ability to generate the most efficient and useful purchases for the company. In essence, it is about how to manage the processes of buying machinery, components, commercial promotion for the promotion of the company or services that are used to maintain the morale of its employees, as well as its optimal functioning.

Tips for successfully implementing the value chain

Tip 1: Since the value chain of a business organization must reflect the implemented business strategies, when choosing how to improve said value chain, the positive characteristics that differentiate it from the competition must be clear, or on the other hand, can drive a lower cost structure.

Tip 2: Faced with a large list of changes to implement for the modernization of the company, it is very important to prioritize and focus on those changes that are the ones that will have the most positive impact on the customer.

Tip 3: It is recommended to delve into each of the items that make up the value chain, both in determining their primary activities and in support activities. From this dynamics, items can be found that may have a poor performance and that have a wide potential for improvement, which in the end will end up increasing the competitive advantage of the entire company.

Tip 4: The value chain is determined mainly according to an internal analysis of the company, so it is recommended, for greater efficiency, to carry out studies on external circumstances that may influence the value and competitive advantage of the business.

conclusion

Como se ve en este post, el conocimiento de la cadena de valor puede ser verdaderamente útil para aumentar considerablemente el valor agregado y la ventaja competitiva de una organización empresarial. Teniendo en cuenta estos datos, se pueden tomar mejores decisiones para llevar adelante cualquier propuesta dirigida no solo al establecimiento, sino además a la preservación y desarrollo de cualquier tipo de negocio o compañía. Por ello, es tan importante entender y aplicar eficazmente la cadena de valor en todas las iniciativas de tipo empresarial, dado que será la base sobre la que se sustentará la solidez de nuestra compañía o negocio.