The Harvard's Michael Porter sometimes ago, proposed the concept of Value Chain as a tool for identifying ways to create more value for customers.
This model says, every firm is a synthesis of activities perform to design, to produce, to market, to deliver and to support it's product.
The value identifies nine stratecally relevant activities - five primary and four support activities - that create value and cost in specific business.
The primary activities are inbound logistics that helps in bringing materials into the business: operations or converting them into finished products.
Outbound logistics on the other hand focuses on shipping out final products, selling and servicng them.
The support activities entails procurement, technology development, human resources management and the firm infrastructure which handled by specialized departments. These may include planning, financing, accounting, legal etc.
A firm must examine its costs and performance in each value-creating activity and look for ways to make them better
Managers should estimate their rival's costs and performances as benchmark against which to compare their own costs and performance. And they should go forth and study the best practices of the best companies.
Question: why are the best companies the best?
If we keep waiting for the apple to create a new design, the way new phone should look, we will be way back behind the trend.
Studying best practices is good, but it's better you navigate the world to find and own a space by yourself.
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