CHAPTER 6: Value Chain

Value creation process processing, converting, improving or adding

value to a particular product thereby giving more appeal, utility or
value to a new product that promises a level of satisfaction to
prospective clients or customers.
Value chain system series of activities and process as well as the
supply of raw materials or needed inputs involved in producing a
product or delivering a service constitutes the premises and essence of
these concept.
Supply chain series of activities involved in the production or
processing of a product or rendering of a service.
- it consists of a set of activities involved before the creation or
production of a product or the kind of services to be rendered by the
business firm to the public at large.
- describes how organizations are linked together.
Supply chain-management total system approach to managing the
entire flow of information, materials and services from raw-material
suppliers through factories and warehouses to the end customer.
- (Dietel et al.) strategic management of distribution channels and
processes that support the entire business process.
- (Hau Lee) considers the need for a stable supply process taking into
account mature technologies
Direct involvement creating, producing or assembling a product
through the use of in-house of man power and other forms of resources
Partial/indirect involvement employing the concept of
outsourcing, subcontracting, purchased services, etc.
*Either way, this means necessarily that processing, converting,
improving or adding value to a particular product thereby giving more
appeal, utility or value to a new product that promises a level of
satisfaction to prospective customers.
* Conduct of a service-based business is not really about creating or
selling a tangible product to a client/customer but providing a service
of value to a customer.
*Doing the service itself is a value creation process.
Value chain system the series of activities and process as well as
the supply of raw materials involved producing a product or delivering
a service.

Strategic management of distribution channels and processes that

support the entire business process.
Hau Lees approach to supply chain one of aligning supply chain
activities with the uncertainties revolving around the supply process
side of the supply chain.
Supply chain is an evolving supply process.
*Parties involved in moving the products from the confines or
perimeters of business producing the product are referred to as
downstream activities or distribution chain.
*distribution chain also covers all the other parties with direct and
indirect roles in moving or causing the transfer of the product from its
origin to various places or countries and all the way to final
consumption.
Distribution chain plays major and critical role in determining the
price of the product in the market place.
Extremely important because they serve as a window of opportunities
for forward and vertical integration strategies.
Value chain refers to the processes involved in converting a product
from raw material to its finished, saleable and consumable stage.
Sum of total supply and distribution chain
Center of activity where a component or a process is considered the
most important to the company or the activity central to the existence
of the activity itself.
Aspect or point where its greatest expertise and capabilities lie its core
competencies.
Raison detreof the business or reason for being so to speak.
Primary activities- activities where most of the value creation efforts
are made
Secondary activities support activities that are undertaken to
support the value creation activities both at the level of supply and
distribution chain.
Primary Activities
Inbound Logistics activities associated with raw materials or inputs
procurement activities
Operations activities generally involve in actual conversion of raw
materials into finished product
Outbound logistics sequel to the inbound or processing activities
(storage, distribution & shipping)

Supply chain series of activities involved in productionor

processing of product or rendering a service
Set of activities involved in creation or production or the kind of
services to be rendered by the business firm to public
How organizations are linked together (Chase, Jacobs &Aquilano)

Marketing & sales deals with the interactions with prospective

clients

Supply chain management total system approach to managing the

entire flow of information, materials and services from raw-material
suppliers through factories and warehouses to the end customer.

Corporate Infrastructure support backbone of business operation

Human resources unique activity of matching the right people to the
job expected.

Services focuses on after-sales services to the customer

Secondary Activities

Research and technology development activity that adds value as

it improves the product and the business processes in the primary
activities.
Backward channel companies providing raw material (Suppliers)
Forward channel the distribution side of the business or parties
involved beyond the production and storage line
*more business orgs involved-longer distribution channel-more costly
Seamless chain scenario one that electronically connects various
organizations thereby ensuring timely information sharing and
efficient logistical operations.
e-Commerce/e-Business- companies can use the Internet technology
to improve the efficiency and effectiveness of a particular value-chain
activities
Customer-oriented value chain the customer is the focus to which
all other activities are directed to.

CHAPTER 7: Strategic Management Models

Force majeure
Strategic management models
1. Wright, Kroll and Parnell Model considers analyzing external
environmental opportunities and threats as the beginning
approach.
2. Thompson and Strickland Model identified 5 startegic
management tasks.
first task, developing mission and vision
second task, setting strategic objectives
third task, crafting strategy
fourth task, implementing and executing strategies
fifth, monitoring, evaluation and taking corrective action
3. F.R. David Model identified a series of 6 task
First, developing mission statement
Second, establishing long-term objectives
Third, generating, evaluating and selecting strategies
Fourth, establishing policies and annual objectives
Fifth, allocating resources
Sixth, measuring and evaluating
4. Wheelen and Hunger Model has 4 major tasks
First, environmental scanning important to consider
environmental factors
Second, strategy formulation
Third, strategy implementation
Fourth, evaluation and control
5. Rayport and Jaworski Model somehow simplistic yet appearing
to be good model.
6. Pitts-Lei Model resembles that of Wheelen and Hunger model
that also considers the importance of analysis of external and
internal environment.
7. The Hybrid Model consolidated version of strategic
management models.
Short-term strategic plan plan to be carried out or achieved within
the ensuring year.
Medium-term strategic plan covers a period beyond the short-term
usually ranging from 1-3 years.
Long-term strategic plan - talks about what to achieve beyond the
medium term perios usually anywhere between 3-5 years or even
more.

CHAPTER 8: Environmental Scanning

CHAPTER 9: The Vision and Mission Statement

CHAPTER 10: Setting Strategic Objectives

Vision-mission statement unique characteristic of strategic

management and corporate or business level strategy
- business organizations who have this is considered to have embraced
the principles of strategic management

Strategic objective considered a critical component of the strategic

management process.
- a concrete articulation of the companys vision and mission.

Mission statement talks about the answers to the question What

are we here for?
- (Thompson and Strickland) not to make a profit. The real mission is
always what will we do to make a profit.
- could be broad or narrow:
Narrow mission statement specifies the real arena of
interest of the business organization serving as a boundary
for what to do and not to do.
- serves as the bacon as to where the top management
intends to take the firm
Broad mission statement usually done by large business
organizations that are highly diversified or a conglomerate
in nature. It is purposely crafted.
Vision statement what the founders and managers or leaders of the
business organization would like to see or to become in the long-term
future.
- speaks of a kind of stature or status the business organization would
want to be in the future and in the community it belongs
- matter of culture or core values
Strategic vision concerns a firms future business path where we
are going
- guiding star of the management team and the employees of the
business organization as a whole
- (Thompson and Strickland) roadmap of the company

Goals - represent the desired general ends towards which efforts are
directed.
Objectives specific and quantified versions of goals
Strategic intent connotes a direction and burning desire that a firm
or organization would like to pursue with bulldog tenacity.
Strategic thrusts insinuates a decision-making process biased by
senior management view or what is called or believed as paradigms.
- it takes into consideration 4 internal sub-sectors:
Technology products
Customer sectors
Distribution region
Rules of the game resources
Good objectives
Specific objective must be concrete and specific to the last
detail and its quantifiable
Measurable objective must be tied up or related to the mission
statement and should be measurable
Achievable objective should not be a dream or desire but
should be something achievable or attainable
Realistic and resource-oriented objective must be realistic and
based on the firms resource capabilities both human and other
form of capital or financial resources
Time-bound there must be a time frame or period and limit as
to how soon the objectives can be achieved, preferably soon.