Competitive Advantage: Creating and Sustaining Superior Performance.

Michael Porter

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The sequence of productive processes (functions)from the provision of specific inputs for a particular product to primary production, transformation, marketing and up to final consumption. An institutional arrangement linking and coordinating producers, processors, traders and distributors of a particular product.

A sequence of related business activities (functions) from the provision of specific inputs for a particular product to primary production, transformation, marketing, and up to the final sale of the particular product to consumers (the functional view on a value chain).

The set of enterprises (operators) performing these functions i.e. producers, processors, traders and distributors of a particular product. Enterprises are linked by a series of business transactions in which the product is passed on from primary producers to end consumers. According to the sequence of functions and operators, value chains consist of a series of chain links (or stages).

Case Study of Value Chain

 

The basic concept of a supply chain / supply chain management is similar to the value chain. The difference is that the supply chain refers to sequence of (upstream) sourcing and (downstream) marketing functions of individual enterprises, mostly of lead companies. Therefore, supply chain management is a business management tool rather than a development concept. It is concerned with logistics rather than market development.

Cluster Industry, Clusters: An industry cluster is a grouping of related industries and institutions in an area or region. The industries are inter-linked and connected in many different ways. Some industries in the cluster will be suppliers to others; some will be buyers from others; some will share labor or resources. The important thing about a cluster is that the industries within the cluster are economically linked, they both collaborate and compete and are, to some degree, dependant upon each other; and ideally, they take advantage of synergies. World Bank - LED.

Strategic Planning, is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis involving Socio-cultural, Technological, Economic, Ecological, and Regulatory factors.

CSR (Corporate Social Responsibility), The commitment of businesses to behave ethically and to contribute to sustainable economic development by working with all relevant stakeholders to improve their lives in ways that are good for business, the sustainable development agenda, and society at large.

Innovation and Competitiveness, The performance of an economy results from a series of variables: At the micro level, competitiveness is determined by “hard” comparative advantages such as the location, the availability of primary resources and the cost of labour, as well as by “soft” conditions, e.g. the entrepreneurial competence.

Yet, competitiveness also is a function of value chain coordination and the existence of supporting agencies at the meso level. Finally, the business enabling environment determines the overall cost of business making. Taken together, competitiveness is expressed by measures indicating technical efficiency and profitability as well as innovation and investment rates.

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