What is Porter's value chain?

In the framework of the modern model of economic developmentOf particular importance is the ability of each enterprise to effectively position and improve its advantages in a global competitive environment.

For several years, Russia has been instate of economic reform. In the course of transformations, new economic relations are developing in a comprehensive manner in all sectors. A flexible and adaptive management system is being formed, the conditions necessary for successful entrepreneurial activity are being created.

Meanwhile, most Russian enterprises do notready for active combat. This negatively affects their performance. To improve the situation is possible only through the release of competitive products that are focused on the needs of the buyer. To do this, in turn, it is necessary to forecast business development in a timely manner, to collect and analyze information about prospects and opportunities, the state of the market, the position of competitors in it. Will help in this Porter's value chain.

Strategic analysis

It is an essential element of the success of an enterprise. The company's management must clearly understand the needs of the market, strive to meet them with more than competitors.

The success of the enterprise depends on knowledge.market conditions, achieving competitiveness, advantages, ensuring the organization a stable position. Business management is a dynamic process. It requires continuous monitoring of the activities of the enterprise.

Porter's Theory

A modern and effective assessment toolThe competitiveness of both individual states and regional production is a theory of advantages. It can be applied to individual industrial areas, and to the economy as a whole. One of the tools of this theory is Porter's model - value chain. It provides a deeper understanding of the processes occurring within the enterprise.

First M. Porter's value chain was described in 1985It is a sequence of enterprise actions aimed at transforming resources into a final service or product. In essence, Porter's value chain is a strategic planning tool that provides a detailed study of the company's operations.

The essence of the concept

It consists in the fact that an enterprise in the course of its activity forms a certain set of values ​​for consumers. Buyers, in turn, should need them and be willing to pay for them.

In Michael Porter's value chain деятельность компании разделялась на основную и auxiliary. The first at the same time directly adds the cost to the final service or product. Auxiliary activities indirectly ensure the effective and efficient implementation of key tasks.

Structure

To the main activity in value chain M. Porter relates:

• Internal logistics. It involves the control of stocks, the distribution of primary components.
• Operations. During them, the primary components are converted into the final product.
• External logistics. It includes the distribution and storage of the product.
• Marketing, sales. Within this activity, the main tool is advertising.

Auxiliary directions in Porter's value chain are:

• Logistics. The company purchases the necessary materials and raw materials.
• The development of technology. Within this direction, processes, stocks and the product itself are developed.
• Human Resource Management. It involves the selection and training of employees, the introduction of a system of motivation and remuneration of staff.
• Enterprise infrastructure. Its formation is carried out in the framework of planning, financing, management.

Analysis of the value chain of M. Porter

Like any other theory, the concept has a number of advantages and disadvantages.

Advantage Porter's value chains Consider the amount of information that can be obtained during the analysis. This data is used to check the compliance of each type of activity with the maximum achievable indicators in a particular industry.

Porter's value chain allows you to more effectively plan activitiesidentify the most promising options for improving the cost competitiveness of the company. Accordingly, the company management can choose the best way to minimize them.

There is only one flaw in the concept. Minus qPorter's values Unavailability of cost informationother businesses because they are confidential. In addition, a comparison of costs can be done not in all cases, as firms tend to use different methods of their accounting.

Porter's value chain: an example

Рассмотрим, как действует концепция на примере the company whose main activity is related to the scrap processing industry. In the photo below you can see the factors that ensure the competitiveness of the company.

In the presented chain the competitive advantages of the enterprise are clearly visible.

However, since the organization’s activities have their own specifics, certain points should be clarified:

• The term "margin" at the end of the scheme is the difference between the total value of the product produced and the complex costs incurred in the implementation of all activities.
• Соответствие нормативам означает, что на каждый The metallurgical plant is subject to certain standards for the acceptance of scrap at its site for subsequent use. The list of standards is set in GOST.
• The company is a scrap reseller.The first is the purchase and collection of raw materials from the points of reception, which belong to the company. After that, it is transported to the base, where it is sorted, cut and pressed for subsequent sale. Next, the delivery is made in accordance with the concluded agreements.
• For rail transportation, which is the main way to move raw materials, will be paid by the final buyer. At the same time scrap is not subject to VAT.

Explanations

Opportunity analysis based on chain assessmentvalues ​​allows you to determine the position of business in the industry. Porter believed that an enterprise could have an advantage only within one of two possible standard strategies: leadership or differentiation in terms of expenditure.

The ability to compete in a concrete way stems from a preliminary assessment of the competitive forces, understanding of the potential based on the analysis of the chain.

Assessment of weaknesses and strengths of the enterprise

For convenience, the analysis of the strengths and weaknesses in the business is presented in the table.

According to the results of the analysis, we can conclude thatThe company's strategy is focused on achieving cost leadership, since its components are economy of scale, minimization of costs for a PR campaign, and coverage of significant market space.

Risk factors

Today Porter's concept is considered the mostconvenient and easy to understand analysis tool. Many enterprises actively use it in their activities. However, it should be said that in the modern world the value chains have undergone significant changes. At the same time, risk factors are becoming increasingly important. These include:

• Limited resources, increasing population, environmental degradation. These circumstances are united by the concept of "environmental risk factors".
• Extreme natural conditions, problems of political and social instability, etc. They are called geopolitical risks.
• The threat of "digital disintegration". Recently, the Internet is not always recognized as a reliable means of doing business and communication.

Principles for increasing sustainability

Considering the risks, every enterprise seeksdevelop the most effective strategy for enhancing your advantages. Among the most effective principles of improving sustainability in the market should be noted:

• Analysis and adaptation. The management of the organization, if necessary, changes and improves the strategy, tactics and capabilities, takes into account its previous experience and analyzes the activities of competitors.
• Contacts and interconnections. Information about possible risks is disseminated both within the enterprise and throughout the value chain.
• Forecast threats. The company is forming a group of analysts who predict probable problems and opportunities for their prevention.
• Rapid response systemThe presence of diversified assets and resources allows you to quickly adapt to a changing environment, as well as to quickly implement measures to restore normal operation.

The choice of principles, methods, tools for improving the sustainability of the chain will depend on the scale of the enterprise, the specific conditions of activity, as well as the scope of opportunities.