Page 1
Eleonora Escalante, MBA - MEngStrategic Corporate Advisory Services
Creating Corporate Integral Value (CIV)
Leg 6. Value Chain Analysis
Value Chain Methodology Approach
Competitive Differentiation Analysis. Steps 1 to 4.
18 Feb 2018
Cartoon Source: Rethinking the Value Chain. http://www.futurevaluenetwork.com/cartoons/
Page 2
OUTLINE Leg 6. Value Chain Analysis
Leg 6. From Hong Kong to Auckland.
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved
01Key Concepts
Value Chain
Analysis
06Summary and
Conclusions
02Value Chain
Methodology
Approach
18 Feb2018
03Who Uses Value
Chain Analysis?
04Advantages and
Disadvantages
Value Chain
05Innovating
through Value
Chain Analysis
2
Page 3
OUTLINE Leg 6. Value Chain Analysis
Leg 6. From Hong Kong to Auckland.
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved
01Key Concepts
Value Chain
Analysis
06Summary and
Conclusions
18 Feb2018
03Who Uses Value
Chain Analysis?
04Advantages and
Disadvantages
Value Chain
05
Innovating
through Value
Chain Analysis
We are here!
3
02Value Chain
Methodology
Approach
Page 4
Leg 6. From Hong Kong to Auckland.
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved 18 Feb2018
We are
here!
The Competitive Differentiation Analysis using the Value Chain can be simplified
in the next 8 main steps:
4
Value Chain Methodology Approach
02Value Chain
Methodology
Approach 1. Determine who the real buyer is
2. Identify the buyer´s value chain and the
firm´s impact on it.
3. Determine ranked buyer purchasing criteria.
4. Assess the existing and potential sources of
uniqueness in a firm´s value chain
5. Identify the cost of existing and potential
sources of differentiation
6. Choose the configuration of value activities
that creates the most valuable
differentiation for the buyer relative to cost
of differentiating.
7. Test the chosen differentiation strategy for
sustainability
8. Reduce cost in activities that do not affect
the chosen forms of differentiation.
FIRM INFRASTRUCTURE
HUMAN TALENT DEVELOPMENT AND MANAGEMENT
TECHNOLOGY DEVELOPMENT
PROCUREMENT
INBOUND
LOGISTICS
Purchasin
g,
Inventory,
Materials
handling
OPERATION
S
OUTBOUN
D
LOGISTICS Warehousing
and
Distributio
n
Sales
and Marketin
g
Dealer
Support
and
Custome
r Service
Pri
mary
Act
ivit
ies
Su
pp
ort
Act
ivit
ies
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Next
Post
Today
Post
Page 5
Leg 6. From Hong Kong to Auckland.
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved 18 Feb2018
We are
here!
The Competitive Differentiation Analysis using
the Value Chain can be simplified in the next 8
main steps:
4A
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
Today
Post
Wh
o T
he
Real
Bu
yer
is?
Iden
tify
th
e
bu
yer´
s va
lue
chain
an
d t
he
firm
´s im
pact
on
it.
Dete
rmin
e r
an
ked
bu
yer
pu
rch
asi
ng
crit
eri
a
Ass
ess
th
e e
xist
ing
an
d
po
ten
tial so
urc
es
of
un
iqu
en
ess
in
a f
irm
´s
valu
e c
hain
Iden
tify
th
e c
ost
of
exi
stin
g a
nd
po
ten
tial so
urc
es
of
dif
fere
nti
ati
on
Ch
oo
se t
he c
on
fig
ura
tio
n o
f va
lue
act
ivit
ies
that
create
s th
e m
ost
valu
ab
le d
iffe
ren
tiati
on
fo
r th
e b
uyer
rela
tive t
o c
ost
of
dif
fere
nti
ati
ng
.
Test
th
e c
ho
sen
dif
fere
nti
ati
on
str
ate
gy f
or
sust
ain
ab
ilit
y
Red
uce
co
st in
act
ivit
ies
that
do
no
t aff
ect
th
e
cho
sen
fo
rms
of
dif
fere
nti
ati
on
.
Next
Post
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Step 8
Step 7
Page 6
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved
Leg 4. From Melbourne to Hong Kong.
Value Chain Methodology Approach
518-Feb-2018
We are
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STEP 1. Determine who the real buyer is.
02Value Chain
Methodology
Approach• This step is “REALLY IMPORTANT” for us to precis.
• Uniqueness does not lead to differentiation unless it is valuable to the buyer.
• The key to be unique is to FOCUS on the buyer, the question is who is our real buyer? what makes our
firm UNIQUE to the buyer?
• A successful differentiator finds ways of creating value for buyers that yield a price premium in excess
of the extra cost incurred by the firm to be different.
• We need to focus on what makes attributes valuable to buyers, and how the firm aggregate activities
can create value TO THE BUYER.
• As we saw it in Leg 2, Buyers are different: industrial, commercial, institutional or individuals-
households.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Industrial Commercial InstitutionalIndividuals or
Households
Page 7
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved
Leg 4. From Melbourne to Hong Kong.
Value Chain Methodology Approach
618-Feb-2018
We are
here!
STEP 1. Determine who the real buyer is.
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
• A firm creates value for a buyer that justifies a
premium price through two mechanisms:
1. By lowering the buyer cost
2. By raising buyer performance
• For Industrial, commercial and institutional
buyers, differentiation requires that our beautiful
business be UNIQUELY able to create
competitive advantage for them in ways besides
a lower price.
• Example: What was DeVinci offer to Citi-Bike?
Raising buyer performance for end consumers?
This implied to raise the level of satisfaction of
bikes to meet the needs of the bike-riders.
Company: Cycles DeVinci from Quebec.
This company has produced the bicycles used in NYC since year
2013, under the brand Citi bike.
The buyer of the Cycles DeVinci is Bikeshare Holdings LLC.
Cycles Devinci were able to enhance the competitive advantage
for the buyers by upgrading the bike whole system in the year
2013.
Source: https://www.citibikenyc.com/
Page 8
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved
Leg 4. From Melbourne to Hong Kong.
Value Chain Methodology Approach
718-Feb-2018
We are
here!
STEP 1. Determine who the real buyer is.
02Value Chain
Methodology
Approach
• The principle applies for households and
individual consumers.
• The way we measure the buyer cost and buyer
performance is more subtle.
• Through Differentiation we wish to maximize
the VALUE for individual buyers.
• For household buyers: The Price of a product
includes:
• Example: The Buyer´s Value of Fresh Salmon
Filet in New York.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Total Price: Economic Price + Time Price + Convenience Price
Buyer´s Value = Utility – Total Price
US$14.99/pound US$8.74/pound
Location:
D´Agostino 54st,
Manhattan
In Store Pickup
Location: Walmart
Supercenter, North Bergen,
NJ. Product can be bought
only in store.
Product: Fresh Salmon Filet
Buyer: A Financial Executive who lives in
the Westport (500 West 56th Street, NY).
Where does the Financial Executive buy the fresh
salmon for his dinner?
The buyer will invite his boss and the wife of him, and a
couple of colleagues.
vs
Page 9
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved
Leg 4. From Melbourne to Hong Kong.
Value Chain Methodology Approach
818-Feb-2018
We are
here!
STEP 1. Determine who the real buyer is.
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
US$14.99/pound US$8.74/pound
Location:
D´Agostino 54st,
Manhattan
In Store Pickup
Location: Walmart
Supercenter, North Bergen,
NJ. Product can be bought
only in store (No online)
Product: Fresh Salmon Filet
Buyer: A Financial Executive who lives in
the Westport (500 West 56th Street, NY).
• The price of fresh salmon filets at D´Agostino is higher than Walmart
(North Bergen) by 42%.
Why did the buyer decide to buy it at D´Agostino 54th St?
• The buyer home is located just 1 block walking distance from DÁG
store.
• Buyer´s Profile: He has a busy schedule, lack of time and doesn´t want
to incur in costs associated to transportation, neither the annoyance
of leaving Manhattan to go to North Bergen. In addition the buyer
wishes to cook himself a ”safe” recipe which can delight his invitees.
Salmon is a good option.
• The BUYER “subjectively” sets a Utility higher than the price he will
pay by buying the D´Ag salmon.
• The Price Premium he is willing to pay is higher too.
• Other Supermarket competitors around D´Ag 54 Street do not have
the same reputation of “high quality and freshness” salmon.
• With this example, D´Agostino Supermarket can define who ARE the
real buyers. Differentiate itself in adding VALUE by analyzing every
single value activity of the Buyer Value Chain, to innovate against its
competitors such as Whole Foods Columbus Circle and other
competitors with different value propositions as Fresh Direct, etc.
The buyer decided to buy the Salmon
at D´Agostino 54st Store.
Page 10
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved
Leg 4. From Melbourne to Hong Kong.
Value Chain Methodology Approach
918-Feb-2018
We are
here!
STEP 1. Determine who the real buyer is.
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Buyer value increases as (1) the utility increases (raising
buyer performance and level of satisfaction or prestige) , or
the price paid reflects a (2) reduction of other costs such as
time costs, cost of frustration, annoyance or exertion.
PLEASE REMEMBER:
• A firm or household does not purchase a product. Individuals
who are decision makers do.
• The Buyer´s VALUE and signals of value are assessed and
interpreted by these individuals.
•
The identity of the specific person who make the purchase
decision will influence, if not determine the VALUE attached
to a product.
Buyer´s Value = Utility – Total Price
An oven for a “mom” who
loves to bake pastries which
uses less electricity than other
ovens. The value is reflected in
reduction of the electricity bill.
A vacuum cleaner that
saves vacuuming time and
reduces exertion is valuable
to the household buyer.
The Value is reflected in
time saving.
A new touch display of 75” that
has better picture quality, 3
years guarantee. The school
will be willing to pay a
premium because it leads a
valuable satisfaction.
Page 11
In industrial, commercial or institutional buyers:
Different decision makers VALUE different things
about a supplier and use different signals to assess
them.
Examples:
A purchasing agent can value:
• To keep cost of purchase to a minimum.
• Reliability as higher as possible
• Outstanding quality
The process to identify the REAL BUYER is an art. It
takes a lot of observation: Other factors to consider
are brand prestige, personal relationships with
supplier personnel, desire to avoid risks, expertise
and sources of information used, etc.
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved
Leg 4. From Melbourne to Hong Kong.
Value Chain Methodology Approach
1018-Feb-2018
We are
here!
STEP 1. Determine who the real buyer is.
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
• In industrial, commercial or institutional buyers, in
addition it is so important to understand the
difference between the decision maker who
purchases and who the real buyer is.
• The identity of the specific person or persons who
make the purchase decision will influence, if not
determine, the value attached to a product.
• Example: The doctor who acts as a purchasing agent
chooses the medicines, not the patient.
Buyer´s Value = Utility – Total Price
Page 12
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11
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
STEP 2. Identify the buyer´s value chain and the firm´s impact on it.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
A firm reduces buyer price or raises buyer utility through the impact of its value chain on the
buyer´s value chain.
FIRM INFRASTRUCTURE
HUMAN TALENT DEVELOPMENT AND MANAGEMENT
TECHNOLOGY DEVELOPMENT
PROCUREMENT
INBOUND
LOGISTICS
OPERATIONS OUTBOUND
LOGISTICS
Sales
and Marketing
AFTER
SALES
SERVICE
Pri
mary
Act
ivit
ies
Su
pp
ort
Act
ivit
ies
BUYER INFRASTRUCTURE
HUMAN TALENT DEVELOPMENT AND MANAGEMENT
TECHNOLOGY DEVELOPMENT
PROCUREMENT
INBOUND
LOGISTICS
OPERATIONS OUTBOUND
LOGISTICS
Sales
and Marketing
AFTER
SALES
SERVICE
Pri
mary
Act
ivit
ies
Su
pp
ort
Act
ivit
ies
Buyer´s Value ChainOur Company Value Chain
Buyer´s Value = Utility – Total Price
Page 13
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We are
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12
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
STEP 2. Identify the buyer´s value chain and the firm´s impact on it.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
• Buyers have value chains consisting of the activities they perform just as the
firm does.
• The buyer´s needs are the underpinnings of buyer value and differentiation.
• The buyer´s value chain determines the way in which a firm´s product is actually
used as well as the firm´s other value activities affect on the buyer´s activities.
• Each buyer (industrial, commercial, institutional or individual consumer) has
their own value chain.
Buyer´s Value ChainOur Company Value Chain
FIRM INFRASTRUCTURE
HUMAN TALENT DEVELOPMENT AND MANAGEMENT
TECHNOLOGY DEVELOPMENT
PROCUREMENT
INBOUND
LOGISTICS
OPERATIONS
OUTBOUND
LOGISTICS
Sales
and Marketi
ng
AFTE
R
SALES
SERVI
CE
BUYER INFRASTRUCTURE
HUMAN TALENT DEVELOPMENT AND MANAGEMENT
TECHNOLOGY DEVELOPMENT
PROCUREMENT
INBOUND
LOGISTICS
OPERATIONS
OUTBOUND
LOGISTICS
Sales
and Marketi
ng
AFTE
R
SALES
SERVI
CE
For example a firm product or service
is a purchased input to its buyer´s
value chain: The eggs, flour and
ingredients used at Anna Olson´s
Cooking Programs are inputs for her
own value chain
Page 14
HP Spectre x360 (13-inch, 2017) Cnet
review:
A laptop weight and size is important for a
consultant that travels from place to place
though it is not relevant if we see the buyer
activity simply as “delivering solutions to
clients”
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13
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
STEP 2. Identify the buyer´s value chain and the firm´s impact on it.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
• A firm product will have both direct and indirect impact on the buyer´s chain
that go beyond the activity in which the product is actually used. The firm has
to check how the product is ACTUALLY USED, which can differ in how was
intended to be used.
• A firm impacts the buyer not only through the product but also through other
value activities such as the logistical, system, order entry system, sales force,
after sales services and applications operations group.
• In consequence, the value a firm creates for its buyer is determined by the
whole array of links between the firm´s value chain and its buyer´s value chain.
• A firm´s overall level of differentiation is the cumulative value to the buyer of
the uniqueness throughout its value chain.
• This cumulative value can be calculated and provides the upper limit of the
price premium the firm can command relative to its competitors.
Page 15
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14
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
STEP 3. Determine ranked buyer purchasing criteria.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
What is the Buyer Purchase Criteria?
It is the specific attribute or set of attributes of a firm
which create actual or perceived value for the buyer. The
buyer purchase criteria can be: Use Criteria, or Signaling
Criteria.
What is an Attribute: It is a quality or
feature regarded as a characteristic or
inherent part of someone or something.
Synonyms:
characteristic, trait, feature, element, aspect
, property, sign, hallmark, mark, distinction.
Informal: X factor
Buyer Purchase
Criteria
Use CriteriaSignaling
Criteria
Page 16
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15
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
STEP 3. Determine ranked buyer purchasing criteria.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Buyer Purchase
Criteria
Use CriteriaSignaling
Criteria
• The use purchase criteria comes from the way in which
the firm affects the buyer VALUE through raising
utility or through lowering costs.
• Use Criteria are specific measures that create Buyer´s
value: product quality, product features, delivery time,
applications production support.
Buyer´s Value = Utility – Total Price
• The signaling purchase criteria comes from signals of
Utility drivers that enhance the buyer´s VALUE, or
means used by the buyer to infer or judge what a
supplier´s actual value is. Signaling criteria might include
factors such as advertising, the attractiveness of facilities
and reputation.
• Signaling criteria are subjective measures of how
buyers perceive the presence of value.
Use Criteria
Signaling Criteria
Page 17
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Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
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16
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
STEP 3. Determine ranked buyer purchasing criteria.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Use Criteria
The physical features of the product
System used by the firm to deliver and support the product
Specifications achieved by a firm´s product (or value activities)
Conformance. Consistency with which it meets those
specifications
Intangibles: style, prestige and perceived status, brand
connotation
Characteristics of distribution channels (Downstream value)
Any factor that improve the chances that a product is used as
intended.
Example: Owning a
Gulfstream Business
Jet can lead to
considerable prestige
for executives with
respect to their peers.
Page 18
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Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved 18 Feb2018
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17
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
STEP 3. Determine ranked buyer purchasing criteria.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Signaling Criteria
Reputation or image of the firm
Cumulative Advertising
Weight or Outward appearance of the product
Packaging and labels
Time and Experience in business: installed base, parent company
identity, visibility top management, after sales reinforcement-
training and detailed support
Customer list
Market Share
PWC pays close attention to
office décor and appearance of
employees.
Steinway Pianos has
recognized the use of pianos by
concert pianist is a powerful
signaling criteria. Steinway
maintains a Piano Artist
Databank.LBS pays close attention to
MBA Alumni by offering
worldwide alumni celebrations
and continuous training.
Page 19
Identify the decision
maker buyer and
other influencers to
the buyer (channels)
Identify and make a
list of use criteria
precisely
Identify and make a
list of signaling
criteria by
understanding the
buyer psychological
judgements
Make a ranking and
sorting of purchase
criteria by end-user or
channel in a matrix.
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18
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
STEP 3. Determine ranked buyer purchasing criteria.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Now that we have understood the use criteria of value and the signaling criteria of
value, the process of ranking buyer purchasing criteria is:
Page 20
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19
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
STEP 3. Determine ranked buyer purchasing criteria.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Ranked Buyer Purchase Criteria for a Carrot Cake
End Buyer
Channels
Use Criteria Signaling Criteria
• Taste
• Moisture
• Texture
• Appearance
• Price
• Freshness
• Size
• Cake Shop
Advertising
• Shelf Positioning
• In-Store Display
• Availability
• Speed of order
Processing
• Channel Margin
• Reliability of
Service
• Delivery
• Reputation of
the distribution
channel (if
applicable)
• Market Share of
the Cake ShopCan we classify the criteria for
attributes of a carrot cake?
Of course, Yes!
Page 21
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20
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
STEP 3. Determine ranked buyer purchasing criteria.
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Relationship between Use Criteria and Buyer Value
Lower
Buyer Price
Raise Buyer
Utility
Readily
Measurable
Difficult to Measure
(or quantify before buying it)
• ?
• Differentiation that lowers buyer price provides
a more persuasive justification for paying a
sustained price premium than differentiation
that raises Buyer Utility.
• Differentiation with a readily measurable
connection to buyer value is also more
translatable into a price premium than
uniqueness that creates value in ways that are
hard to measure or perceive.
• Differentiation that is difficult to measure
tends to translate into a price premium primarily
in situations where the buyer perceives a great
deal to be at stake: Ex: The case of our Fresh
Salmon Buyer who wants to be safe in terms of
buying excellent quality for his invitees.
• Differentiation at the right hand side of the
matrix is expensive to explain and requires
high levels of investment in signaling.
• Freshness
• Moisture
• Texture
• Price
• Size
• Appearance
• Appearance
• Freshness
• Delivery
• Reliability of
Service
This is what the
buyer wishes
Buyer´s Value = Utility – Total Price
Page 22
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21
Value Chain Methodology Approach
02Value Chain
Methodology
Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
STEP 4. Assess the existing and potential sources of uniqueness in a firm´s
value chain
A firm´s uniqueness in each value activity is determined by a series of basic drivers which
I have prepared in advance.
See the set of
slides ANNEX
Uniqueness
Drivers.
Page 23
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Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017 Eleonora Escalante-all rights reserved 16 Feb2018 22
Thank you!
On my next post we will continue sailing with
the steps 5 to 8 of the Differentiation Analysis.All the material
shared today is
from the book
“Competitive
Advantage,
Creating and
sustaining
Superior
Performance”,
From Michael
Porter.
We are
here!
02Value Chain
Methodology
Approach
Value Chain Methodology Approach
2. Second Use of VCA: From the Customer Point of View: Competitive Differentiation Analysis
Wh
o T
he
Real B
uyer
is?
Iden
tify
th
e b
uyer´
s
valu
e c
hain
an
d t
he
firm
´s im
pact
on
it.
Dete
rmin
e r
an
ked
bu
yer
pu
rch
asi
ng
crit
eri
a
Ass
ess
th
e e
xist
ing
an
d p
ote
nti
al
sou
rces
of
un
iqu
en
ess
in
a f
irm
´s
valu
e c
hain
Iden
tify
th
e c
ost
of
exi
stin
g a
nd
po
ten
tial so
urc
es
of
diffe
ren
tiati
on
Ch
oo
se t
he c
on
fig
ura
tio
n o
f valu
e a
ctiv
itie
s th
at
create
s th
e m
ost
valu
ab
le d
iffe
ren
tiati
on
fo
r th
e
bu
yer
rela
tive t
o c
ost
of
diffe
ren
tiati
ng
.
Test
th
e c
ho
sen
diffe
ren
tiati
on
str
ate
gy f
or
sust
ain
ab
ilit
y
Red
uce
co
st in
act
ivit
ies
that
do
no
t aff
ect
th
e c
ho
sen
fo
rms
of
diffe
ren
tiati
on
.
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