The value chain

In this lesson

1. 0:00 Understanding competitive advantage
2. 2:05 Cost leadership versus differentiation
3. 4:26 Porter's value chain framework
4. 5:08 Primary activities explained
5. 6:01 Support activities explained
6. 8:04 Applying value chain to gain advantage
7. 12:10 Value chain analysis for competitive edge
8. 13:06 Value networks and interconnected organisations

About this lesson

You'll discover the two main types of competitive advantage (cost leadership and differentiation) and how to identify which one your organisation should pursue. The value chain breaks down a business into nine interconnected activities: five primary activities (inbound logistics, operations, outbound logistics, marketing and sales, and service) and four support activities (procurement, technology, human resources, and firm infrastructure). Each activity creates value for the customer, and by optimising them strategically, a company can either reduce costs significantly or differentiate its offering in ways competitors cannot match. Through practical examples like smartphone manufacturers and the car industry, you'll see how companies use value chain analysis to pinpoint where they can build sustainable competitive advantage. You'll also explore value networks—the extension of a single company's value chain across multiple organisations including suppliers, distributors, and retailers. Understanding how interconnected businesses collaborate, share information and resources, and work together to serve the end customer will help you recognise real-world competitive strategy in action. This framework is essential for answering case study questions and strategic analysis across your qualification.

Duration: 17m