Author:TomMacinaReviewers:ScottBender,PeterFisher,CyrusVilla,AmmarMaraqabcValueChainMarch1998Copyright©1998Bain&Company,Inc.2valuechainValueChainbcCHICopyright©1998Bain&Company,Inc.ValueChainAnalysisAgenda•Theconcept•ValueChainmethodology•Example3valuechainValueChainbcCHICopyright©1998Bain&Company,Inc.ValueChainAnalysisTheConcept•Valuechainanalysisisasystematicmethodfordisaggregatingafirmorindustryintoitsmajordiscreteactivitiestounderstandsourcesofcompetitiveadvantage•Valuechainanalysiscanbeusedtoidentifyopportunitiesto–gaincostadvantage/improveperformance–increasecompetitivedifferentiation•Valuechainanalysisisananalyticaltoolwhichcanhelpprovideclaritytoconsultantsandclients–allowsdistinctboundariestobedrawnacrossbusiness(orindustry)process–allowsconsultanttoclearlyevaluateandprioritizeactivitiesonwhichtofocus–facilitatesclientunderstanding4valuechainValueChainbcCHICopyright©1998Bain&Company,Inc.ValueChainAnalysisGenericValueChainSuccessivelyfinerdisaggregationsofactivitiesaremadetoexposedifferencesimportanttocompetitiveadvantageThegenericvaluechainconsistsofsixgeneralactivities.Tech.,R&DPurchasing/InboundLogisticsManufact-uring/OperationsMarketing&SalesDistribution/OutboundLogisticsService5valuechainValueChainbcCHICopyright©1998Bain&Company,Inc.ValueChainAnalysisCommonUsesValuechainanalysiscanbeusedasananalyticaltoolintwogeneralsituations.ValueChainAnalysisasatoolforCompetitiveAdvantageCostAnalysis/PerformanceImprovementCompetitivePositioning•RCP•Re-engineering•Businessdefinition•VMR/Industrycollaboration•Competitivedifferentiation•Drawingbusinessboundaries6valuechainValueChainbcCHICopyright©1998Bain&Company,Inc.ValueChainAnalysisDistribu-tion/OutboundLogisticsServiceValueChainScopeThescopeofthevaluechaindependslargelyonthepurposeforwhichthetoolisbeingused.SystemorIndustryValueChain:FirmValueChain:MajorActivityValueChain:Tech.,R&DPurchas-ing/InboundLogisticsManu-facturing/OperationsMarketing&SalesMaterialPreparationConversionFinalAssemblyQualityAssurancePackagingInputs(Supplier)Conversion(Manufacturer)Distribution(Distributor/Retailer)Consumption(End-User)•VMR•CostAnalysis•ProcessRe-engineering•CostAnalysisSampleUse7valuechainValueChainbcCHICopyright©1998Bain&Company,Inc.ValueChainAnalysisWhentoUseValueChainAnalysisCostAnalysis/RCPProcessRe-EngineeringBusinessDefinitionVMR/IndustryCollaborationCompetitivePositioningMapMajorActivitiesMapSub-ActivitiesAlwaysSometimesUnlikely8valuechainValueChainbcCHICopyright©1998Bain&Company,Inc.ValueChainAnalysisAgenda•Theconcept•ValueChainmethodology•Example9valuechainValueChainbcCHICopyright©1998Bain&Company,Inc.ValueChainAnalysisValueChainMethodology(1of2)1.Whataretheactivities?2.Whichactivitiesaremostcritical?3.Whichcriticalactivitiesprovidethemostopportunity?(Whereisthemostleverage?)Tech.,R&DPurchas-ing/InboundLogisticsManu-facturing/Opera-tionsMarketing&SalesDistri-bution/OutboundLogisticsServiceTech.,R&DPurcha-sing/InboundLogisticsMarketing&SalesDistri-bution/OutboundLogisticsManu-facturing/OperationsService?Therearethreestepsindoingvaluechainanalysis.10valuechainValueChainbcCHICopyright©1998Bain&Company,Inc.ValueChainAnalysisValueChainMethodology(2of2)1.Whataretheactivities??Steponeisdeterminingtheappropriateactivitiestomap.•Determinekeystepsindesigning,producing,marketing,deliveringandsupport...
