Transcript Value creation analysis

MBA Session 2:
Value creation analysis
Knut Haanæs
Associate Professor
Norwegian School of Management - BI
Knut Haanæs
Norwegian School of Management
Value creation analysis
Boeing 767
case
discussion
Knut Haanæs
Case wrap up
The value
chain
Norwegian School of Management
The value chain
The value network
The value shop
Knut Haanæs
Norwegian School of Management
Source: Porter (1985); Stabell and Fjeldstad (1997)
Types of
value creation
Value chain
SUPPORT
ACTIVITIES
Industrial
company
Infrastructure
Human resource
Technology development
Service
Sales and
marketing
Outgoing logistics
Manufacturing
Ingoing logistics
Purchasing
PRIMARY ACTIVITIES
Knut Haanæs
Norwegian School of Management
Porter (1985)
Cost drivers of value
chain
•
•
•
•
•
•
•
•
•
Economies of scale
Learning effects
Capacity utilization
The link between activities
Relationships with other companies
Timing
Integration
Location
Institutional factors
Knut Haanæs
Norwegian School of Management
Reduce costs
Value chain
Manufacture
products
Knut Haanæs
* Transformation
* Chained interdependence
* Long linked technology
* Scale effects
* Sequential dependence
* Chain of chains
Norwegian School of Management
Source: Porter (1985); Stabell and Fjeldstad (1997)
Forms of value creation
Industry of chains
New entrants
Suppliers
Customers
Substitutes
Source: Porter (1980)
Knut Haanæs
Norwegian School of Management
Porter’s industry
framework
New
Entrants
Suppliers
Competitive
Rivalry
Buyers
Substitutes
Source: Porter (1980)
Knut Haanæs
Norwegian School of Management
Positioning
Product
Differentiation
Cost Leadership
Focus
Product differentiation focus
Cost leadership focus
Source: Porter (1980)
Knut Haanæs
Norwegian School of Management
COST
INDUSTRY
Strategic advantage
SEGMENT
UNIQUENESS
Value shop
SOLVE PROBLEMS
Knut
Knut Haanæs
Haanæs
* Problem solving
* Different disciplines
* No line; circle
* Mostly primary activities
* Reputation driven
* Industry: Referrals
Norwegian School of Management
Stabell and Fjeldstad (1997)
Value shop
Value network
Mediates
customers
Knut Haanæs
* Mediating technology
* Network of customers
* Synchronous activities
* Value created simultaneous,
vertical and horizontal coproduction
* Cooperation and competition
Norwegian School of Management
Stabell and Fjeldstad (1997)
Value network
Value creation and
resources
Value creation
Competence
Relations
Chain
Efficiency
Scale
Quality
Flow
Quality
Reliability
Shop
Problem solving
New combinations
Mobilize competencies
Reputation
Referrals
Sub-contracting
Network
Contracting
Segmenting
Communicating
Knut Haanæs
Norwegian School of Management
Many relations to
many customers
Many co-operative /
competitive partners