6.11 The Business Value Chain Model

	Porter model is very important to businesses for identifying competitive forces and strategies, but this model doesn’t tell business where do they start as a methodology and operational process.
	Business value chain model identifies specific activities in this business and highlights critical ones for helping management to use information technology effectively.
	By business value chain model, you can see company as a series of chain of activities which add value to products or services.
	These activities can be classified as primary activities or as support activities as shown in Figure 6.3
	Primary activities are activities that create value to customers and related to the production and distribution of products and services.
	Primary activities include inbound and outbound logistics, operations, marketing and sales, and service.
	Inbound logistics such as storing material for production. Outbound logistics include storing and distributing finished products.
	Operations transform inputs into outputs. Marketing and sales include selling and promoting products and services (e.g. maintenance services).

6.11 The Business Value Chain Model

Figure 6.3 The Value Chain Model

6.11 The Business Value Chain Model

	Supporting activities, which are required for primary activities to be executed, include administration staff, human resources, technology, and procurement.
	Use of business value chain model helps to benchmark the firm’s business processes against competitors, and helps to identify industry best practices.
	Benchmarking is a reference for businesses to compare performance against standards and then can measure it.
	Best practices are methods that firms implement to achieve their objectives in an efficient and effective way.