Michael E. Porter's Value Chain model analysis the flow of value-adding activities in firms

The value chain was introduced by Michael E. Porter in 1985 in the book “Competitive Advantage". "Value chain" is used to analyze the flow of value-adding activities from the raw material supplier to the end customer.
The model consists of 9 fields. These are Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, Service, Procurement, Technology Development, Human Resource Management and Firm Infrastructure.
The model looks at what value each link adds the company and thereby uncovers the company's competitiveness.
Section
0:00 Introduction of the author and the purpose of the model
0:31 The nine activities and margin also called profit
1:23 The nine activities divided into two categories
1:59 The five primary activities in the bottom of the model
3:52 The four support activities in the upper part of the model
7:09 Use of the model
8:03 A review of an example - baldes for windmills
11:43 Criticism of the model
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  • @AnthonyRamtulla
    @AnthonyRamtulla6 жыл бұрын

    Clear and concise - a very good tutorial.

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  • @annavrhee6363
    @annavrhee63633 жыл бұрын

    short, clear and visible, a very good explanation of the model. thank you

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    3 жыл бұрын

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  • @petrospetrou-kritwnos3756
    @petrospetrou-kritwnos37563 жыл бұрын

    Wish Porter was never existed! He is the nightmare of every Management, Finance and Accounting student!

  • @flixabout

    @flixabout

    3 жыл бұрын

    You are not the only student, who feels this way. That's why we made movies with this and other models. We hope they are useful.

  • @Theusoliverrr

    @Theusoliverrr

    4 ай бұрын

    fr bro 🤣i cant hear that name anymore

  • @julserrano
    @julserrano3 жыл бұрын

    Very well explained! Thank you KZread teachers!

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  • @sachinmayakrishnan7432
    @sachinmayakrishnan74325 жыл бұрын

    Fantastic explanation for value chain analysis! Cheers

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    5 жыл бұрын

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  • @successmaharjan2906
    @successmaharjan29063 жыл бұрын

    Thank you Sir for conceptually clear explanation. Love from Nepal!

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    3 жыл бұрын

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  • @simultaneouslysarah
    @simultaneouslysarah4 жыл бұрын

    God bless you and your family. This video will help me in my exam tomorrow. Thank you!

  • @flixabout

    @flixabout

    4 жыл бұрын

    Thanks for your kind feedback. Hope you get a good exam tomorrow. .

  • @caliphmohamed7896

    @caliphmohamed7896

    4 жыл бұрын

    Keep up

  • @jamesmuluya6316
    @jamesmuluya63165 жыл бұрын

    Thanks for the Lectures. Very well explained.

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    5 жыл бұрын

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  • @londyndebele9857
    @londyndebele98576 жыл бұрын

    Thank you Sir, well explained.

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    6 жыл бұрын

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  • @wanjac
    @wanjac5 жыл бұрын

    I have a presentation about this topic tomorrow, great video!

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    5 жыл бұрын

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  • @XMegaJuni
    @XMegaJuni2 жыл бұрын

    This is awesome, great job. Looking forward for more!

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    2 жыл бұрын

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  • @properoldschool
    @properoldschool3 жыл бұрын

    This was very informative. Thank you so much!

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    3 жыл бұрын

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  • @pantsharad
    @pantsharad5 жыл бұрын

    Thanks a lot, very well illustrated.

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    5 жыл бұрын

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  • @counslify1050
    @counslify10504 жыл бұрын

    very well explained, appreciate your efforts man..

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    4 жыл бұрын

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  • @mohimaaroy3194
    @mohimaaroy31943 жыл бұрын

    Fantastic explanation. I have an exam tomorrow. Used this to understand.

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    3 жыл бұрын

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  • @eduardodelangel7295
    @eduardodelangel72953 жыл бұрын

    Great Video , directly to the point and very understandable topic

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    3 жыл бұрын

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  • @limnadavis6885
    @limnadavis68854 жыл бұрын

    Thank you sir.. this vdo helped me a lot by understanding the basic of value chain .. bz u well explained

  • @flixabout

    @flixabout

    4 жыл бұрын

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  • @vednaramnarain4536
    @vednaramnarain45365 жыл бұрын

    Eve of my exams...thank you very much well explained

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    @flixabout

    5 жыл бұрын

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  • @imcarlover3911
    @imcarlover39115 жыл бұрын

    Very well explained . Thank you sir

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    @flixabout

    5 жыл бұрын

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  • @claudejrtemokang6185
    @claudejrtemokang61854 жыл бұрын

    very helpful. Thanks a lot!

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    @flixabout

    4 жыл бұрын

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  • @resmiliaanugrah702
    @resmiliaanugrah7023 жыл бұрын

    This is well explained, thank you. It's help me a lot for uni exam

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    @flixabout

    3 жыл бұрын

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  • @geraldnjuguna4207
    @geraldnjuguna42075 жыл бұрын

    very well explained. i have understood fully. bravo

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    @flixabout

    5 жыл бұрын

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  • @messididit
    @messididit3 жыл бұрын

    i just wanna say thank you so much! nothing more

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  • @nasiradam25
    @nasiradam256 жыл бұрын

    Well explained and good examples

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    @flixabout

    6 жыл бұрын

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  • @user-dd7eg3gk8x
    @user-dd7eg3gk8x9 сағат бұрын

    Very informative video indeed

  • @user-qr4re1uz8p
    @user-qr4re1uz8p6 жыл бұрын

    Thank u sir.. it's simply amazing

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    @flixabout

    6 жыл бұрын

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  • @ahmedosman7738
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    I love this channel thanks a lot

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  • @adriannaicker3165
    @adriannaicker31656 жыл бұрын

    Perfectly on point, great video

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    6 жыл бұрын

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  • @danielleadamson9762
    @danielleadamson97624 жыл бұрын

    Thank you so much! This has 'helped me prepare for my exam. Hopefully it goes well!

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    @flixabout

    4 жыл бұрын

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  • @mukhriddinkudratov2874
    @mukhriddinkudratov28746 жыл бұрын

    precisely information is given one by one thank you got some notes

  • @flixabout

    @flixabout

    6 жыл бұрын

    Thanks for your kind feedback. Nice that you appreciate our work. Hope you tell it to others and subscribe to our channel. We have no notes to the theory. You can take a transcript, activate subtitles in setting. You can also work in the figure by purchasing our app and download the figure for this theory.

  • @catherineminayochegero5661
    @catherineminayochegero56614 жыл бұрын

    thanks so much well explained.

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  • @thiagoalcantarajnr6015
    @thiagoalcantarajnr60154 жыл бұрын

    Well explain sir,thank you a lot

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  • @angielundy1149
    @angielundy11493 жыл бұрын

    Simple and repetitive so it sticks. Thank you

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  • @sophiesam7392
    @sophiesam73926 жыл бұрын

    Thanks alot you are of good help

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    6 жыл бұрын

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  • @undervalueds
    @undervalueds5 жыл бұрын

    Good one, thanks for this :)

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  • @neema_
    @neema_4 жыл бұрын

    great content! thank you

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  • @ashhadshabbir2670
    @ashhadshabbir26703 жыл бұрын

    Finally I got it at a very beginning of the video.

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    @flixabout

    3 жыл бұрын

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  • @gunasekaranb8610
    @gunasekaranb86105 жыл бұрын

    Well explained thank you sir

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    @flixabout

    5 жыл бұрын

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  • @pratipbhattacharyya6653
    @pratipbhattacharyya66534 жыл бұрын

    great explanation . really appreciate

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    4 жыл бұрын

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  • @catalinaortigoza6803
    @catalinaortigoza68034 жыл бұрын

    very helpful for my exam thank you!!

  • @flixabout

    @flixabout

    4 жыл бұрын

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  • @kartikjoglekar5420
    @kartikjoglekar54203 жыл бұрын

    The narrators voice is stragely calming

  • @flixabout

    @flixabout

    3 жыл бұрын

    Thank you for your response. Nice to hear from a user. That you feel the voice is calming, we take as a good thing. In our opinion, Online learning is best achieved under calm conditions, at the recipient's own pace.

  • @ayuubbare8823
    @ayuubbare88232 жыл бұрын

    Well explained thanks a lot

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    @flixabout

    2 жыл бұрын

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  • @giselegiram
    @giselegiram6 жыл бұрын

    Well explained, nice video.

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    6 жыл бұрын

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  • @hannaxo2110
    @hannaxo21102 жыл бұрын

    very helpful, thank you

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    @flixabout

    2 жыл бұрын

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  • @TakondwaKarenMchakulu
    @TakondwaKarenMchakulu4 жыл бұрын

    Thank you👏🏾👏🏾

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    @flixabout

    4 жыл бұрын

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  • @facebook1492
    @facebook14924 жыл бұрын

    thanks alot very clear

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    @flixabout

    4 жыл бұрын

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  • @poojakiransingh2487
    @poojakiransingh24873 жыл бұрын

    Best tutorial ♥️

  • @flixabout

    @flixabout

    3 жыл бұрын

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  • @HonestFranklin
    @HonestFranklin Жыл бұрын

    Since the company can carry out production activities, it can also purchase and manage accounting. Therefore, the composition of a company's business portfolio is very important.

  • @flixabout

    @flixabout

    Жыл бұрын

    @HonestFranklin. Thank you for your comment. You are right - the business portfolio is very important. Hope you tell it to others and subscribe to our channel.

  • @enkhbate
    @enkhbate Жыл бұрын

    thank you

  • @flixabout

    @flixabout

    Жыл бұрын

    @Enkhbat Enebish. You're welcome. We hope you tell others and subscribe to our channel.

  • @felistusmboko5525
    @felistusmboko55254 жыл бұрын

    Well elaborated

  • @flixabout

    @flixabout

    4 жыл бұрын

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  • @ntcuong01ct1
    @ntcuong01ct13 жыл бұрын

    Dear Friends, I have a question: In the Value Chain Ananlysis, could you talk how the support activities create company margin?. Give me some examples. Thank you.

  • @flixabout

    @flixabout

    3 жыл бұрын

    Interesting question. It will, of course, be different for each organization. But here are a couple of examples: Purchasing procedures can ensure that production never runs out of products to be used in production. The products are ordered in time. Technology development: The automatization of the warehouse system. Easier to find the product for production and for the customers. This makes faster production and delivery = better margin HR: This department help hiring the skills that make the operation run smooth The management ensures that the cooperation between all departments works well. Thank you for your interest. We hope you subscribe and tell others about our channel.

  • @maisallataifeh654
    @maisallataifeh6544 жыл бұрын

    Is it possible to create a value chain for Airport E-gates? And if so, What exactly can I write in them? God bless you, well explained.

  • @flixabout

    @flixabout

    4 жыл бұрын

    Thanks for your kind feedback. Usually, you can use the Value Chain for all businesses. But we do not know enough about Airport E-gates to help you with this specific task. Hope others can. Good luck with the task.

  • @EOCmodernRS
    @EOCmodernRS6 жыл бұрын

    The model does not take into consideration that one point could cost more for you to make than what the customers are willing to pay, yet it is essential for the Whole of the Product.

  • @flixabout

    @flixabout

    6 жыл бұрын

    Thank you for your response. That's a good discussion. Should you keep the entire production in-house or outsource certain parts. We then have to consider quality, delivery terms etc. See, among other things, Krajlic's model on this channel. Thanks again for your interest.

  • @emmavink

    @emmavink

    4 жыл бұрын

    Unless you cut labour costs, outsource cheap, unskilled labour/raw materials from developing countries...there is always exploitation, especially the higher you go in any value chain.

  • @gwynethchanda7071
    @gwynethchanda70714 жыл бұрын

    Well explained and very clear

  • @flixabout

    @flixabout

    4 жыл бұрын

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  • @brvmhisscall7203
    @brvmhisscall72033 жыл бұрын

    Please what do you mean by procurement performs the function of purchasing but not the physical input.. I am not clear with the statement not the physical input can you elaborate me on that please. Thank you.

  • @flixabout

    @flixabout

    3 жыл бұрын

    @Brv MhissCall. Procurement performs the function of purchasing but not the physical input. This is normally a white color function. They negotiate with suppliers about delivery terms. They decide about if orders of goods are just in time or stock. They make all the paper work but the physical delivery of the goods are part of inbound logistics. Hope this little elaboration helps. Please subscribe to our channel and tell others about us.

  • @caliphmohamed7896
    @caliphmohamed78964 жыл бұрын

    Thanks

  • @flixabout

    @flixabout

    4 жыл бұрын

    Thanks for your kind feedback.

  • @najibarahman3200
    @najibarahman32004 жыл бұрын

    How can I analyze the annual report of any marketing of product and explain it using porter's value chain?

  • @flixabout

    @flixabout

    4 жыл бұрын

    That's a good question. It needs to be a very detailed annual report that shows every step in the chain. I personally have not seen any annual report with that information. Usually, you need to get hold of internal data. Are they good at procurement - buying cheap or are they good at producing the products effectively - or do they have an efficient sales team? Some times you can find the margin - the last field in the model. Do they earn money on what they are doing? Hope you can use the answer.

  • @najibarahman3200

    @najibarahman3200

    4 жыл бұрын

    @@flixabout thank you for helping me

  • @flixabout

    @flixabout

    4 жыл бұрын

    Glad it was helpful! We hope you tell others and subscribe to our channel.

  • @salaminampeke653
    @salaminampeke6533 жыл бұрын

    How do I incorporate this model in the healthcare environment? Will the components be that same?

  • @flixabout

    @flixabout

    3 жыл бұрын

    Here is a suggestion on how a hospital fits in. The proposal does not take into account the different ways in which different countries build up their healthcare sector. Always remember to ask your supervisor if this is how it should be understood in your syllabus. If you see the field operations in the model as taking care of patients health. The field logistics in is then ambulances and suppliers of different equipment and medicine. The field outbound logistics is the recovery of the patients after operation and making a plan for the patient to return home. The field Marketing and sales - is it a private or public hospital? Private they make advertisment to the market (B2C). If it is a public hospital, then they try to profile themselves in relation to the decision-makers. In the field service the patients are given the opportunity to get aftercare of their health problems. Remember to ask your supervisor.

  • @Blessedtoblessvale
    @Blessedtoblessvale2 жыл бұрын

    Hello...I have a question... why did michael porters Classify Procurement as a support activity and not a primary activit

  • @flixabout

    @flixabout

    2 жыл бұрын

    It is the administration of procurement not the product itself that is located here. It could be obtaining offers, archiving papers, contacting customs authorities, etc. Hope this answers your question.

  • @antoniosampaio8119
    @antoniosampaio81195 жыл бұрын

    Very good, congrats for good explanation.

  • @flixabout

    @flixabout

    5 жыл бұрын

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  • @IsharaAbeyratne
    @IsharaAbeyratne4 жыл бұрын

    thanks

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    @flixabout

    4 жыл бұрын

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  • @mohammedtayem3188
    @mohammedtayem31885 жыл бұрын

    Good video

  • @flixabout

    @flixabout

    5 жыл бұрын

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  • @thesportsguy10
    @thesportsguy104 жыл бұрын

    1,000th like!! :) Good video!

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    @flixabout

    4 жыл бұрын

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  • @thesportsguy10

    @thesportsguy10

    4 жыл бұрын

    @@flixabout While I have your attention, Question for you... In a real world application of this, if a company is applying this model to their own business, I take it company financials should be incorporated into this analysis to quantify the analysis? From a student POV who is applying this to a college assignment on strategic management, is it just to be used as a guide to visualising and analysing all the internal linkages?

  • @flixabout

    @flixabout

    4 жыл бұрын

    @@thesportsguy10 There is an economy in the model. It is the tenth field - profit - explanation starts at 0:40. Does the company have profits? Can the company sell goods at a higher price than it costs to manufacture them? However, the model does not say in which of the five bottom fields; the company earns the profit. Or which of the four fields at the top performs actions that enable profit. So you're right. The model shows the internal linkages in the company. A separate financial analysis is needed to clarify in which field the profit is earned.

  • @MrKZee
    @MrKZee6 жыл бұрын

    oh this voice... even if the explanation were rubbish, the voice would still make it good...

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    @flixabout

    6 жыл бұрын

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  • @ChikaNeca

    @ChikaNeca

    4 жыл бұрын

    i was just thinking the opposite, that voice is fucking borin, or its just management, management is fucking boring

  • @ma.veronicajusayan5487
    @ma.veronicajusayan54876 жыл бұрын

    how to do a scattergram and histogram

  • @flixabout

    @flixabout

    4 жыл бұрын

    I do not know. Try to google it.

  • @kundankumar-fi3zj
    @kundankumar-fi3zj Жыл бұрын

    ,👍😍

  • @flixabout

    @flixabout

    Жыл бұрын

    @user-ej8xr7te8f Glad you enjoyed it! Hope you tell it to others and subscribe to our channel.

  • @Proteinball
    @Proteinball3 жыл бұрын

    Why does he sound like David Attenborough?

  • @flixabout

    @flixabout

    3 жыл бұрын

    @Lillian N David Attenborough! Thank you - we have never considered that, but we take your comment as a compliment.

  • @edemirdoguhan3925
    @edemirdoguhan39253 жыл бұрын

    Hi people from Saxion..

  • @edemirdoguhan3925

    @edemirdoguhan3925

    3 жыл бұрын

    MAGIC

  • @flixabout

    @flixabout

    3 жыл бұрын

    Hope you get answers from people from Saxion

  • @edemirdoguhan3925

    @edemirdoguhan3925

    3 жыл бұрын

    @@flixabout Thx lol

  • @wesleytrumbauer6868
    @wesleytrumbauer68684 жыл бұрын

    I'm pretty sure you mean Micheal E. Porter, not Micheal S. Porter. You really sent me on a wild goose chase for a guy that doesn't exist....

  • @flixabout

    @flixabout

    4 жыл бұрын

    Yes - sorry - it is Michael E. Porter. Thanks for the feedback. We will change that at the next review of the film .

  • @wesleytrumbauer6868

    @wesleytrumbauer6868

    4 жыл бұрын

    @@flixabout Thanks! I'm writing a paper and had a bit of an existential crisis when I saw the S. Ended up searching to see if he had a twin or something haha

  • @wesleytrumbauer6868

    @wesleytrumbauer6868

    4 жыл бұрын

    Great breakdown though

  • @flixabout

    @flixabout

    4 жыл бұрын

    Thanks!

  • @edemirdoguhan3925
    @edemirdoguhan39253 жыл бұрын

    Make the speed 1.25

  • @flixabout

    @flixabout

    3 жыл бұрын

    Thank you for your interest. Yes, we also recommend using 1.25 or 1.5 when listening to our movies. If you want to listen to the speech, read the text of the model itself and the subtitles at the same time, then it is best to stay at normal speed. Thanks again for your interest. We hope you subscribe and tell others about our channel.

  • @apexoutdoor
    @apexoutdoor5 жыл бұрын

    Bus 890 Was Here !! Like if you're from that class

  • @flixabout

    @flixabout

    4 жыл бұрын

    Hope you met the others from your class somewhere else

  • @alienufo3293
    @alienufo32933 жыл бұрын

    BSAB ASAN KAYO comment nga kayo HAHAHAHA

  • @flixabout

    @flixabout

    3 жыл бұрын

    @Alien UFO - Sorry - I do not understand this comment.

  • @anonomyss
    @anonomyss6 жыл бұрын

    Had to speed this up 2x. Way too fucking slow holy crap.

  • @flixabout

    @flixabout

    6 жыл бұрын

    We recommend people to choose speed 1.25 or 1.5 if it's too slow. All our videos are recorded at the same speed so you have the choice.

  • @akanicolerocks711
    @akanicolerocks7112 жыл бұрын

    This is so boring and dry

  • @flixabout

    @flixabout

    2 жыл бұрын

    @akanicolerocks711. Thanks for your feedback. We try to provide knowledge about various theoretical models on our KZread page. We have decided that we will not attempt to be funny. We prefer to be as correct as possible in our presentation of the models and thus risk it being perceived as boring and dry. A funny attitude can be misunderstood in a learning situation especially when people from different cultures use our channel. We hope you understand our priorities.

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