Value Chain Analysis and Value Creation for Godrej Industries Ltd.

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VALUE CHAIN ANALYSIS AND VALUE CREATION For Godrej Industries Ltd. WHAT IS VALUE CHAIN ANALYSIS OR VALUE CHAIN? A value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market. To better understand the activities through which a firm develops a competitiveadvantage and creates shareholder value, it is useful to separate the businesssystem into a series of valuegenerating activities referred to as the value chain. Michael Porter introduced a generic valuechain model that comprises a sequence of activities found to be common to a widerange of firms. Porter identified primary and support activities as shown in thefollowing diagram: The goal of these activities is to offer the customer a level of value that exceeds thecost of the activities, thereby resulting in a profit margin.The primary value chain activities are:      Inbound Logistics: the receiving and warehousing of raw materials, and their distribution to manufacturing as they are required. Operations: the processes of transforming inputs into finished products and services. Outbound Logistics: the warehousing and distribution of finished goods. Marketing & Sales: the identification of customer needs and the generation of sales. Service: the support of customers after the products and services are sold to them. These primary activities are supported by:     The infrastructure of the firm: organizational structure, control systems, company culture, etc. Human resource management: employee recruiting, hiring, training, development, and compensation. Technology development: technologies to support value-creating activities. Procurement: purchasing inputs such as materials, supplies, and equipment. The firm's margin or profit then depends on its effectiveness in performing theseactivities

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