Every organisation can be viewed as value chain approach. Value chain approach as a
collection of value activities that are performed to design, produce, market, deliver and
support its product. The basic categories of value activities can be grouped into two broad
types: primary and support or secondary activities.
1 Primary Activities
Primary activities are those involved in the physical creation of the product and service in
the organisation. Its delivery of goods and service and marketing to ultimate buyer and
it’s providing after sales support to buyer. These activities are supporting to organisation
that provide inputs or infrastructure to the business. Primary activities principally
compose of five activities:
i) Inbound Logistics
Inbound logistic activities are associated with receiving, storing and
dissemination inputs to the product like material handling, warehousing,
inventory control, vehicle scheduling and returns to suppliers.
ii) Operations
Operations activities are associated with transforming inputs into the product
form, like machining, packaging, assembly, equipment maintenance, testing
printing and facility operations in the organisation.
iii) Outbound Logistics
Outbound activities are associated with collecting, storing and physically
distributing the product to buyers like finished products warehousing, material
handling, delivery vehicle operation, order processing and scheduling.
iv) Marketing and Sales
Marketing and sales activities are associate with providing goods and services to
customer can purchase the product and inducting them to do so. Marketing and
sales activities are advertising, promotion, sales force, quoting, channel selection,
channel relations and pricing strategy of the organisation.
v) Service
Service activities are associated with providing service to enhance or maintain
the value of the product. Service activities are like installation, repair, training,
and parts supply and product assessment.
The primary activities most deserving of further analysis depend on the particular Industry.
2 Support Activities
Support value activities arise in any one of four activities like procurement, technology
development, and human resource management and organisation infrastructure.
These categories can be identified or disaggregated by isolating technologically or
strategically distinct activities. Identifying support activities often overlooked as sources
of competitive advantage. Support activities are listed below:
i) Procurement
Procurement activities are involved in obtaining purchased inputs like raw
materials, purchased services and machinery or so on. Procurement stretches
across the entire value chain; therefore, it supports every activity-closely relating
to be purchased inputs of some kind. Different people typically perform with many
discrete procurement activities in an organisation.
ii) Technology Development
Technology development activities are involved in desiring the product like
creating and improving quality of the products and service. Technological
development is closely relating to innovation of new products and service of the
organisation. We shall tend to think of technology in terms of the product or
manufacturing process. However, every activity of the organisation performs and
involves a technology. Organisation has developed own research and development
department for performing to innovation of new product and service.
iii) Human Resource Management
Human resource management activities are necessary to ensure the recruitment,
training and development of employees in the organisation. Every activity involves
human resources. Therefore, human resource management activities can control
and manage across the entire chain.
iv) Organisation Infrastructure
Organisation infrastructure activities are such activities as general management,
accounting, legal, finance, strategic planning and all others developed organization
specific primary activities or support activities but essential to the entire chain’s
operation.
Titany answered the question on
October 19, 2021 at 13:09