value chain

1. VALUE CHAIN

3. Ex. 3-1. The Value Chain Infrastructure Human Resource Management Technology Development Procurement PRIMARY ACTIVITIES Inbound Logistics Operations Outbound Logistics Marketing / Sales Service SUPPORT ACTIVITIES Reprinted/Adapted with the permission of The Free Press, a division of Simon & Shuster, Inc., from COMPETITIVE ADVANTAGE: Creating and Sustaining Superior Performance, by Michael E. Porter. Copyright ©1985 by Michael E. Porter.

7. Ex. 3-2. Pizza Restaurant Industry Value Chain Infrastructure Human Resource Management Technology Development Procurement PRIMARY ACTIVITIES Obtain funds, carry out accounting and payroll functions, and perform other administrative tasks for each activity Supervise truck drivers & warehouse personnel Improve truck routing & warehouse methods Buy trucks, lease warehouse space Haul dough, cheese, etc. to restaurants Supervise kitchen personnel Develop new menu items, improve oven design Buy dough, cheese, ovens, and supplies Cook pizzas, make salads, etc. Supervise advertising personnel Discover new promotional materials Buy TV time Develop advertising copy Supervise waiters Improve restaurant lay-out Buy tables, chairs, silver-ware to equip restaurant Serve food to restaurant customers Inbound Logistics Operations Outbound Logistics Marketing / Sales Service SUPPORT ACTIVITIES Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

8. Ex. 3-3. Automotive Industry Value Chain Obtain funds, carry out accounting and payroll functions, and perform other administrative tasks for each activity. Supervise truck drivers, warehouse personnel Improve truck routing & warehouse methods Buy trucks, lease warehouse space Transport components to assembly facility Supervise assembly workers Improve product design & assembly process Buy components, assembly equipment Assemble components into autos Supervise advertising & sales personnel Improve selling methods Hire advertising agency, buy media time Advertise, promote, & sell autos Supervise maintenance personnel Improve maintenance procedures Buy tools for maintenance personnel Maintain, repair autos Inbound Logistics Operations Outbound Logistics Marketing / Sales Service (Same as inbound logistics) Transport autos to dealers (Same as inbound logistics) (Same as inbound logistics) Infrastructure Human Resource Management Technology Development Procurement SUPPORT ACTIVITIES PRIMARY ACTIVITIES Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

9. Ex. 3-4. Pizza Hut’s Business System Infrastructure Human Resource Management Technology Development Procurement SUPPORT ACTIVITIES PRIMARY ACTIVITIES Inbound Logistics Operations Outbound Logistics Marketing / Sales Service Key: = Extensive activity = Modest activity = No activity

10. Ex. 3-5: GM’s Business System SUPPORT ACTIVITIES Infrastructure Human Resource Management Technology Development Procurement PRIMARY ACTIVITIES Inbound Logistics Operations Outbound Logistics Marketing / Sales Service Key: = Extensive activity = Modest activity = No activity