Understanding the Dynamics of the Value Chain

The Porter Model

Porter’s value chain identifies nine generic activities broken down into four support activities and five primary activities (see Figure 1.1). The support activities include a firm’s infrastructure, human resource management, technology development, and procurement. The primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and customer service. A firm needs to realize a suitable margin from the activities it undertakes to deliver the product or service to the customer.

Figure 1.1. Michael Porter’s value chain.

In addition, Porter set a firm’s value chain as one (although key) ...