Which does not comes under the primary activity of value chain analysis?
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Answer:
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Answer:
Inbound Logistics
Inbound logistics include the receiving, warehousing and inventory control of a company's raw materials. This also covers all relationships with suppliers. For example, for an e-commerce company, inbound logistics would be the receiving and storing products from a manufacturer that it plans to sell.
Operations
Operations include procedures for converting raw materials into a finished product or service. This includes changing all inputs to ready them as outputs. In the above e-commerce example, this would include adding labels or branding or packaging several products as a bundle to add value to the product.
Outbound Logistics
All activities to distribute a final product to a consumer is considered outbound logistics. This includes delivery of the product but also includes storage and distribution systems and can be external or internal. For the e-commerce company above, this includes storing products for shipping and the actual shipping of said products.
Marketing and Sales
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. Continuing with the above example, an e-commerce company may run ads on Instagram or build an email list for email marketing.
Services
This includes activities to maintain products and enhance consumer experience—customer service, maintenance, repair, refund, and exchange. For an e-commerce company, this could include repairs or replacements, or warranty.
Value Chain Secondary Activities
Now, companies can further improve the primary activities of their value chain with secondary activities. Value chain support activities do just that, they support the primary activities. The support, or secondary, activity generally plays a role in each primary activity. Such as human resource management, which can play a role in operations and marketing and sales. Here are the four supporting activities.
Procurement
Procurement is the acquisition of inputs, or resources, for the firm. This is how a company obtains raw materials, thus, it includes finding and negotiating prices with suppliers and vendors. This relates heavily to the inbound logistics primary activity, where an e-commerce company would look to procure materials or good for resale.
Human Resource Management
Hiring and retaining employees who will fulfill business strategy, as well as help design, market, and sell the product. Overall, managing employees is useful for all primary activities, where employees and effective hiring are needed for marketing, logistics, and operations, among others.
Infrastructure
Infrastructure covers a company's support systems and the functions that allow it to maintain operations. This includes all accounting, legal, and administrative functions. A solid infrastructure is necessary for all primary functions.
Technological Development
Technological development is used during research and development and can include designing and developing manufacturing techniques and automating processes. This includes equipment, hardware, software, procedures, and technical knowledge. Overall, a business working to reduce technology costs, such as shifting from a hardware storage system to the cloud, is technological development.
Bottom Line
The primary activities within Michael Porter's value chain are used to provide a company with a competitive advantage in any one of the five activities so it has an advantage in the industry in which it operates. In general, the analysis was meant for companies that manufacture goods. But almost any company can use the value chain analysis laid out by Porter even if they don’t have all the components.
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