The document discusses value chain analysis and related concepts. It defines value as the total amount buyers are willing to pay for a firm's products. A value chain includes all activities from procurement of raw materials to delivery of the final product or service. It categorizes activities as either primary like operations and sales, or support like human resources. The document uses Pizza Hut as a case study and outlines its value chain, which involves inbound logistics of ingredients, operations of pizza preparation, outbound logistics of delivery, and more. Value chain analysis is used to identify sources of competitive advantage and opportunities to lower costs or improve differentiation.

1. Submitted By -: Submitted to -:
Shubham Jaiswal Ruchika Thakkar Sharma
BATCH - PGDM ( 2019 -2020 )
( Sri siim )

2.  What is Value ?
 What is Value Chain ?
 TYPES OF VALUE CHAIN ?
 What is Value Chain Analysis ?
 TYPES OF FIRM ACTIVITIES ?
 Case study of Pizza hut.
 USES OF VALUE CHAIN ANALYSIS

3.  THE VALUE IS THE TOTAL AMOUNT (i.e. TOTAL REVENUE) THAT BUYERS ARE
WILLING TO PAY FOR A FIRM’S PRODUCTS.
 THE DIFFERENCE BETWEEN THE TOTAL VALUE (OR REVENUE) AND THE TOTAL
COST OF PERFORMING ALL OF THE FIRM’S ACTIVITIES PROVIDES THE MARGIN .

4.  Porter’s definition includes all activities to design, produce, market, deliver, and
support the product/service.
 The value chain is concentrating on the activities starting with raw materials till
the conversion into final goods or services.
 Two categories:
Primary Activities (operations, distribution, sales)
Support Activities (R&D, Human Resources)

5.  Value Chain is categorized into types based on the type of
organizations.
Manufacturing based.
 • Service based.
Both manufacturing and service based.

6.  Used to identify sources of competitive advantage.
 Specifically:
• Opportunities to secure cost advantages
• Opportunities to create product/service differentiation
 Includes the value-creating activities of all industry participants Value Chain
Model

7. (FISH BONE DIAGRAM)

8. TYPES OF FIRM ACTIVITIES -:
 Primary activities - Those that are involved in the creation, sale and transfer of
products (including after-sales service)
1. Inbound logistics 2. Operations 3.Outbound logistics 4. Sales and marketing
5. Service and support
 Support Activities - Those that merely support the primary activities.
1. Human resources (general and admin.) 2. Tech. development
3 . Procurement

9. PRIMARY ACTIVITIES :-
1. INBOUND LOGISTICS - CONCERNED WITH RECEIVING, STORING,
DISTRIBUTING INPUTS (e.g. HANDLING OF RAW MATERIALS,
WAREHOUSING, INVENTORY CONTROL)
2. OPERATIONS - COMPRISE THE TRANSFORMATION OF THE INPUTS
INTO THE FINAL PRODUCT FORM (E.G. PRODUCTION, ASSEMBLY, AND
PACKAGING)
3. OUTBOUND LOGISTICS - -INVOLVE THE COLLECTING, STORING,
AND DISTRIBUTING THE PRODUCT TO THE BUYERS (e.g. PROCESSING
OF ORDERS, WAREHOUSING OF FINISHED GOODS, AND DELIVERY)

10. CONT.……
4. MARKETING AND SALES - Identification of customer needs and
generation of sales. (e.g. ADVERTISING, PROMOTION, DISTRIBUTION)
5. SERVICE - INVOLVES HOW TO MAINTAIN THE VALUE OF THE
PRODUCT AFTER IT IS PURCHASED.(e.g. INSTALLATION, REPAIR,
MAINTENANCE, AND TRAINING)

11. SUPPORT ACTIVITIES -:
1. FIRM INFRASTRUCTURE The activities such as Organization structure,
control system, company culture are categorized under firm infrastructure.
2. HUMAN RESOURCE MANAGEMENT Involved in recruiting, hiring, training,
development and compensation.
3. TECHNOLOGY DEVELOPMENT These activities are intended to improve the
product and the process, can occur in many parts of the firm.
4. PROCUREMENT Concerned with the tasks of purchasing inputs such as raw
materials, equipment, and even labor.

12. USES OF VALUE CHAIN ANALYSIS -:
1. The sources of the competitive advantage of a firm can be seen from its discrete
activities and how they interact with one one another.
2. The value chain is a tool for systematically examining the activities of a firm and
how they interact with one another and affect each other’s cost and
performance.
3. A firm gains a competitive advantage by performing these activities better or at
lower cost than competitors.
4. Helps you to stay out of the “No Profit Zone”
5. Presents opportunities for integration.

13. CASE STUDY -
Pizza Hut
Pizza Hut is one of the best widespread international fast food joint. It offers
different styles of pizza along with some side dishes like salads, pastas,
buffalo wings/potato rings, breadsticks, and garlic breads. It is a subsidiary of
Yum! Brands(a Fortune 300 company), the world's largest restaurant
company. It is an American restaurant chain with more than 6,000 Pizza Hut
restaurants in the United States, and more than 5,600 store locations in 94
other countries and territories around the world. It entered India in 1996, with
its first branch in Bangalore and expanding all over thereafter, creating a
large customer base for itself.

14. VALUE CHAIN OF PIZZA HUT -:

15. CONT.…..