Competitive Advantage: Creating and Sustaining Superior Performance

The problem with this approach is that it does not identify the real value that consumers gain from the product. This real value is identified when the MP3 player industry is considered on a broader level. This broader view shows that value is added more by marketing than by manufacturing. Apple's value chain includes the major activities that instill value in the product. Marketing with the aim of gaining consumer support is one of the key ways to add value. It is this aspect that Apple competes against with the other organizations in the market. This illustrates that value chain management is a process of recognizing what activities add value to the organization and then focusing on these activities to gain competitive advantage. The aim is not to improve everything about the organization, but to improve the processes that will allow the organization to gain an advantage on the competition.

             Porter (39) also identified various generic factors that are part of an organization's value chain. These generic factors are: inbound logistics, operations, outbound logistics, marketing and sales, and service. Porter considered that these five areas add value to a firm. Porter (40) also identified several support factors. These support factors are: infrastructure of the organization, human resource management, technology, and procurement. Porter identified these generic factors as a general guideline for organizations, while noting that the industry's competitive factors determine what factors will comprise the value chain for a specific firm. For example, in the case of Apple's Ipod, sales and marketing would be a key factor and technology would also be a part of the value chain. In the case of an organization manufacturing and selling nails, sales and marketing is not likely to be a large part of the value chain. Instead, operations may be more important, with the aim being to manufacture the nails as cost effectively as possible so as to maximize profits.

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