Value Chain Approach

Sorry just had a little eureka moment - the processes within the value chain have to add value - therefore if they do not we should look to assess their strategic importance and complexity with a view to automating or outsourcing! So I guess in answer to my own question we identify what processes there are and then see if they add value if not automate or outsource.

You are mixing up two different models: value chain and Harmon's Process Strategy Matrix. The whole value chain has to add value and management can change activities so as to try to add more value. Automating and outsourcing might bring improvements, but so could better training, better research, better use of the internet in marketing, perhaps moving the business to a different part of the country (ie changing firm infrastructure).

Dear sir, Is it a good idea to describe activities of value chain in single sentence before we identify and explain problems in value chain in the scenario and suggest improvements in it. Regards, Muhammed saqib tariq

The most I would say before beginning to address the scenario is something like: "Porter's value chain sets out an organisation's activities so that these can be analysed to determine how the organisation adds value to make profits". This is useful because the purpose of the value chain is not the diagram: it is to understand how the business carries out its activities, what it does, so that customers are willing to pay more than the cost of those activities.