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IT and Strategic Systems - Research Paper Example

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The value chain analysis model was developed by Michael Porter in 1985 where he recommended that the activities within a firm should add value to the commodities produced by the firm and that all the activities should take place at an optimum level in order to allow the firm to…
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IT and Strategic Systems
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Download file to see previous pages Currently, competitive advantages mainly originate from technological enhancements as well as innovation regarding business models and processes. This makes support activities like information systems along with research and development the most important sources of advantage in terms of differentiation. Additionally, primary activities are mainly the sources of cost advantage making the costs easily identifiable for every activity and thus properly managed (Harvard Business Publishing, 2008).
The main aim of value chain activities is offering the customers value that will surpass the costs of the activities so that it can lead to profit margins. The primary activities associated with the value chain include inbound logistics that involves receiving and warehousing materials that will be used for production as well as distributing them to the manufacturing department when they are needed. Other activities are operations, which entail the process of transformation of inputs into finished commodities, and outbound logistics that involves storing the finished goods in warehouses and distributing them when needed. Marketing and sales, involving identifying the needs of the customers and generating sales as well as service that supports customers after they have bought the commodities are also activities that are associated with the value chain. These activities are supported by among other things technological development, which comes up with various technologies that support the activities of creating value (Netmba.com, 2010).
Porter’s five forces assume five significant forces that define the level of competition in a business environment including supply power that evaluates the ease with which suppliers can increase prices depending on the number of suppliers on every key input, how unique the commodity is and the costs associated with ...Download file to see next pagesRead More
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