Value chain analysis focuses on where the resources of the organisation can be used to achieve competitive advantage. It provides a systematic way of determining how organisations create value.
Value chain analysis should identify the major cost drivers and value drivers.
Internal and external benchmarking of activities in the value chain is critical either for lagging companies to imitate another company’s competitive advantage, or for a company to reassure itself that its competitive advantage is being maintained.
Linkages between activities within the value chain and between different value chains make competitive advantage more difficult to imitate and ensure that an organisation will create more value as an entity than it would if it were ‘unbundled’ into separate independent units.
Reconfiguration of the value chain is a powerful way of achieving competitive advantage.
Internet offers many opportunities for reconfiguring the value chain and creating competitive advantage.