Porter’s value chain model

Introduction
The person most accredited for mounting and articulating the value chain thought is Michael
Porter in his 1985 book, Competitive advantage. He offers viewing a firm as a sequential
procedure of value-creating actions as a means of an influential conceptual tool for thoughtful
the building slabs of competitive advantage.
Value chain
The value chain shows the full variety of activities that are needed to bring a product or
organization from conception, throughout the intermediary stages of production (involving a
grouping of physical change and the effort of various manufacturer services), rescue to final
consumers, and final removal after use. (Porter, 1985) The Michael Porter value chain structure
has two parts. The first part holds five “primary” processes:

 Inbound Logistics (warehousing, receiving and inventory management of raw

materials and mechanism);
 Operations (value-creating actions that change raw materials and parts into finished
salable yields);
 Outbound Logistics (warehousing, order fulfillment, transportation)
 Sales & Marketing (channel assortment, pricing, advertising, sales)
 Service (customer care, repair, etc.).

The second part holds four “support” type methods:

 Firm transportation (management, finance, quality, legal)

 Procurement (acquirement)
 Human Resources (enlisting, development, reimbursement)
 Technology Expansion (research and growth, process mechanization, and other
technology progress). (Porter, 1985)

The five forces analysis is intended to help corporations understand how gainful an industry is
and also what they can do to alleviate unenthusiastic forces and thereby improve productivity.
Considering the five forces model, we can create to see how this links to the generic approaches.
Sales and Marketing

The fact that products are produced doesn’t automatically mean that there are people willing to
purchase them. This is where marketing and sales come into place. It is the job of marketers and
sales agents to make sure that potential customers are aware of the product and are seriously
considering to purchase them. Strategies to enhance visibility and target appropriate customers
such as advertising, promotion, and pricing are included in marketing and sales. Basically, this is
all activities that help convince a consumer to purchase a company’s product or service.
Activities associated with marketing and sales are therefore to provide a means by which buyers
can purchase the product and induce them to do so.

Pricing

Pricing is the process whereby a business sets the price at which it will sell its products and
services, and may be part of the business's marketing plan.

Communication

The Marketing Communication refers to the means adopted by the companies to convey

messages about the products and the brands they sell, either directly or indirectly to the
customers with the intention to persuade them to purchase.

Promotion

In marketing, promotion refers to any type of marketing communication used to inform or

persuade target audiences of the relative merits of a product, service, brand or issue. The aim of
promotion is to increase awareness, create interest, generate sales or create brand loyalty.

Products based on community needs

Sellers could offer products in the school and the community based on existing needs and demands

For example, Water bottle is demanded in schools and community, clothings, streets foods and
many more example which belongs according to demand and need in the community

Low Price

Higher sales volume lead to lower production cost and increased profits in the long run.This
strategy of keeping the price low is also known as Market Penetration ...
Sales and Marketing Example

Compared to its competitors, Trader Joe's barely does any traditional marketing. However, its
entire in-store experience is a form of marketing. The company's copywriters craft product labels
to appeal specifically to its customer base. Trader Joe's' unique branding and innovative culture
indicate that the company knows its customers well—which it should, as the firm has actually
chosen the type of customers it prefers and has not deviated from that model.

Via this indirect marketing of style and image, Trader Joe's has succeeded in differentiating itself
in the marketplace, thus sharpening its competitive edge.