The fundamental which must be taken into account while aligning overall organization strategy through efficiently optimizing it's value chain.

1. Business Strategy-Value Creation and Strategic Performance
In this brief article I will enumerate a mental approach and technique for evaluating
strategic positioning and for understanding the strategic challenges, having wide
application across business entities and diversified industries. I would label it as
Strategic Value Analytics and is correlated on the established value creation chain
conceptual parameters of strategic management perspective. What differentiates about
Strategic Value Analysis is its critical focus on numerical quantitative value - synergy
and analytical measured insights. Such analytically focused approach allows much
richer and more distinct awareness of the fundamental economic centered business
shaping choices.
Comparative based competitive leverage in the marketplace ultimately derives from
providing better customer value for comparable cost (differentiation) or equivalent
customer value for a lower cost (low cost). Sporadically, but not that often, a company
achieves both by providing better value at a lower cost. What-ever the focus for a
company, value chain analysis is paramount to identify exactly where in the chain
customer value can be enhanced or costs adjusted? A concepts based on one of the
business modeling tools of Blue Ocean Strategy (BOS - ERRC). It could be a very costly
mistake to overlook linkages between upstream company as and downstream.
This value chain framework is a methodology for breaking down for a given value of a
company’s from basic raw materials to end-user customers (Marketing perspective) into
strategically relevant activities in order to understand the behavior of costs and the

2. value enablers of value differentiation. We know that most successfully managed firms
are those which that span the entire value chain in which they operate.
To recapitulate, a company is typically only a part of the larger set of activities in the
value delivery system in which it participates. Since no two companies of which we are
aware, even in the same industry, compete in exactly the same set of markets with the
same set of suppliers, but the positioning within the overall value chain for each
company is distinct which makes it better competitive than others.
Suppliers are not merely are the producers and distributors but also a valuable source of
feeding and delivering inputs used in a firms value-enhancing activities, and hence
impact the company's cost - differentiation ratio and market place positioning.
Understanding gaining and maintaining a competitive edge necessitates that a firm
must understands its entire value delivery nomenclature, and not just the part of subsets
of the value chain in which it functions. The relationship of suppliers and suppliers and
customers and suppliers' suppliers – customers’ have economic and financial margins
which vital are in identifying and understanding a company's cost – differentiation
positioning matrix and space it operates - since the end-use customers ultimately pay
for all the profit margins along the entire value chain.
In brief, fixating only on a company's "value addition" (revenues - purchases) rather of
its value chain incorporates two pivotal weaknesses’. It kicks offs too late and stops far
too soon.
Although Strategic Value Analysis (SVA) can be a beneficial tool for describing the
Comparable position of companies in an given industrial sector, by far its greatest value
is in helping to rudder a plan for managerial actions. In its specificity, SVA points to an
broad structure, - markets and assets as well as the "boxes and lines" of detailing
relationships, most likely to succeed in a defined slice of an industry. These testimonies

3. can be exercised either in the view of a minor niche player or for operating blocks of a
multidivisional corporation.
Is SVA Well Suited for my organization?
There can be four fundamental tests that can be applicative to establish if SVA could be
supportive strategic tool for any firm/entity.
1. IF - there new/added or emergent players in my industrial sector (indoors of any
fragment of the value chain) that might be more successful than prevalent market
players?
2. These firms placed and located in the value chain differently from present players?
3. Market prices emerging transverse segments/ block of the value chain? Do these
markets adequately deep enough to mirror ‘remote’ trading?
4. If I utilized and availed these market prices as (transferred)- dispatched prices in my
company, if it fundamentally alter the pattern that my major operating unit’s behavior?
In the answer to these inquires is "yes," SVA is most plausible to be an insight triggering
tool.
These new players generally were not considered by the majors as "competitors."
Outside companies purchasing assets were often viewed as bottom feeders of secondary
importance. Branded distributors were viewed as still part of the team since they carried
the company brand upon sale (at least for a fixed period of time). The majors generally
preferred to compare themselves only with other majors; they saw no reason to compare
their integrated downstream structure with that of a distributor.
SVA Test No. 1 provides a clue here: New companies were entering a mature industry
with poor returns. What were they up to?

4. Question 2: Do these companies utilize a different structure occupying a single value-
chain segment or running multiple segments in a nonintegrated fashion?
These new companies were almost always structured in a dramatically different way
from the industry's incumbents. They generally chose to focus on a narrow section, or
even one segment of the value chain.
To re-emphasizes, SVA supports to grasp not only the evidence that new emerging
players are knocking at the door, but also how their companies are dissimilar from those
of key players.
Question 3: If new market prices evolving across blocks of the value chain that
previously have been integrated? Are these markets suffice deep to admit entry by new
market players?
Test 3, of SVA can define how this (decoupled) panorama of the business evolved to
become an industry standard when numerically calculated. The emergent landscape of
these multiple distant markets suggests that the new players were viable in the
marketplace.
Question 4: Can answer (If calculated) if I utilized these market prices as the basis for
my firm’s transfer prices, how far it ‘centrally’ change the position that I desire to annex
in the value chain? Would it change or alter and (what degree) the way that my major
operating units will shape up.
What it explains and derives with ( SVA) is a clearer, more serviceable view of
competitive advantage, roots of profitability and areas for enhancement at all steps and
phases of the value chain. This phase-specific realization and understanding is most
crucial in all multiplex industries, because any given changes in one stage or leg almost
& always influence businesses all along the chain in continuity.

5. Thus, we need to believe and expect that competition not as a goal, but as part of the business
multilayered landscape — a vital factor of the substance in which a company pursues to create
value. Then it transforms’ into critical view - are the substitute responses to competitiveness
initiated by other firms, some of which are more probable to flourish than others, depending
upon the nature of the business environment in varied aspects and nature?
As a general rule of thumb, one must remember and learn to apply –
 Foremost, is to conceptualize about creating the greater value, then fancy about seizing that part
of that value as ROI and profitability.
 Real value creation and strategic growth and profitability sustenance can only occurs when firms
continuously develop streams of products and services that can have and tend to offer distinct
and gripping rewards and benefits in shape of (more delight and lesser pain) to a selected and
preferential set of consumers and customers. What it means that to preserve and mange industry
leadership, for which a company must implant a sustainable process of value creation through
innovation, improvisation and optimization
Farooq Omar – Corporate and Business Strategist & Consultant.