Creating Value through Value Chain Activities
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Creating Value through Support
Functions
©2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
The Value-Creating Potential
of Primary Activities
•Inbound Logistics
The Value-Creating Potential
of Primary Activities (cont’d)
•Marketing and Sales
equivalent or inferior.
©2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
The Value-Creating Potential
of Primary Activities: Support
•Procurement
The Value-Creating Potential of
Primary Activities: Support (cont’d)
•Firm Infrastructure
competitor’s abilities and rated as superior,
equivalent or inferior.
©2017 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
Outsourcing
•Outsourcing is the purchase of a value-creating
activity from an external supplier.
Outsourcing Decisions
A firm may outsource all
or only part of one or
more primary and/or
Primary Activities
Strategic Rationales for Outsourcing
Strategic Rationales for Outsourcing (cont’d)
•Accelerating re-engineering benefits
–achieves re-engineering benefits more quickly by
Outsourcing Issues
•Seeking greatest value
–Outsource only to firms possessing a core
competence in terms of performing the primary or
supporting the outsourced activity.
Outsourcing Issues (cont’d)
•Nonstrategic team resources
–Do not outsource capabilities critical to the firm’s
Competencies, Strengths, Weaknesses, and
Strategic Decisions
•Cautions and Reminders
–Never take for granted that core competencies will
continue to provide a source of competitive
advantage.