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Explain value chain analysis according to Porter.
According to Porter’s value chain analysis:
Value chain analysis (VCA) is a position audit element which examines the internal and current position of an organisation. This is ideal element to examine holistically the operational procedures of an organisation. The wordings of Professor Michael Porter about the value chain analysis; an organisation gets inputs or resources through its environment and converts such to outputs for example, products or services. While doing so this achieves ‘added value’ through this process, creating profit or margin for the organisation. Value is the cause why customers select one rivals product over other, either since the product or service is lower into price or this offers certain features the customer is willing to pay additional for. Porter grouped the different business processes or activities of an organisation in what he termed as the value chain; that he divided the organisations activities in nine types, categorized as either primary or secondary activities.
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