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• Value chain
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Video game industry - Game industry value chain
1 Ben Sawyer of Digitalmill observes that the game industry value chain is
made up of six connected and distinctive layers:
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Value chain
1 A 'value chain' is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or Service (economics)|service
for the market. The concept comes from business management and was first
described and popularized by Michael Porter in his 1985 best-seller,
Competitive Advantage: Creating and Sustaining Superior Performance.
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Value chain
1 The concept of value chains as decision support tools, was added onto the
competitive strategies paradigm developed by Porter as early as 1979. In Porter's value
chains, Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales and Service are categorized as primary activities. Secondary activities include
Procurement, Human Resource management, Technological Development
and Infrastructure. https://store.theartofservice.com/the-value-chain-toolkit.html
Value chain
1 According to the OECD Secretary-General the emergence of global
value chains (GVCs) in the late 1990s provided a catalyst for accelerated
change in the landscape of international investment and trade,
with major, far-reaching consequences on governments as
well as enterprises.
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Value chain - Cross border / cross region Value Chains
1 the emergence of global value chains (GVCs) in the late 1990s provided a catalyst for accelerated change in
the landscape of international investment and trade, with major,
far-reaching consequences on governments as well as enterprises.
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Value chain - Global value chains (GVCs) in Development
1 Through global value chains, there has been growth in
interconnectedness as MNEs play an increasingly larger role in the
internationalisation of business. In response, governments have cut
Corporate income tax (CIT) rates or introduced new incentives for research and development to
compete in this changing geopolitical landscape.
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Value chain - Global value chains (GVCs) in Development
1 In an (industrial) development context, the concepts of Global Value Chain analysis were first introduced
in the 1990s (Gereffi et
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Value chain - Global value chains (GVCs) in Development
1 Value chain analysis has also been employed in the development sector as a means of
identifying poverty reduction strategies by upgrading along the value chain. Although commonly associated with export-oriented
trade, development practitioners have begun to highlight the importance of developing national
and intra-regional chains in addition to international ones.Microlinks (2009) [Value
Chain Development Wiki http://microlinks.kdid.org/vcwiki] Washington,
D.C.: USAID.
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Value chain - Firm-level
1 The appropriate level for constructing a value chain is the business unit, (not division (business)|division or corporate level).
Products pass through activities of a chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of
added values of all activities.Michael E. Porter (1985) Competitive advantage: creating and sustaining superior performance. The Free
Press
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Value chain - Firm-level
1 The activity of a diamond cutter can illustrate the difference between cost and the value chain. The cutting activity may have a low
cost, but the activity adds much of the value to the end product, since a rough diamond is
significantly less valuable than a cut diamond. Typically, the described value chain
and the documentation of processes, assessment and auditing of adherence to the process routines are at the core of the quality
certification of the business, e.g. ISO 9001.
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Value chain - Activities
1 The value chain categorizes the generic Value theory|value-adding activities of an organization. The activities considered under this product/service enhancement
process can be broadly categorized under two major activity-sets.
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Value chain - Activities
1 # Physical/traditional value chain: a physical-world activity performed in
order to enhance a product or a service. Such activities evolution|
evolved over time by the experience people gained from their business conduct. As the will to earn higher
profit drives any business, professionals (trained/untrained)
practice these to achieve their goal.https://store.theartofservice.com/the-value-chain-toolkit.html
Value chain - Activities
1 All activities of persistent physical world's physical value-chain
enhancement process, which we implement in the cyber-market, are in general terms referred to as a
virtual value chain.
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Value chain - Activities
1 In practice , no progressive organisation can afford to remain stuck to any one of these value
chains. In order to cover both market spaces (Market|physical world and Cyber World|cyber world), organisations need to deploy their very best practices in both of these spaces to churn
out the most informative data, which can further be used to improve the ongoing
products/services or to develop some new product/service. Hence organisations today try
to employ the 'combined value chain'.
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Value chain - Activities
1 'Combined Value Chain' = Physical Value shown
in sample below.
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Value chain - Activities
1 After the firm creates products, these products pass through the value chains of distributors (which also
have their own value chains), all the way to the customers
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Value chain - Industry-level
1 The French Physiocrats' Tableau économique is one of the earliest examples of a value
chain
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Value chain - Significance
1 The value chain framework quickly made its way to the forefront of
management thought as a powerful analysis tool for strategic planning.
The simpler concept of Value stream mapping|value streams, a cross-
functional process which was developed over the next decade,,
particularly the Con Edison example. had some success in the early 1990s.
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Value chain - Significance
1 A value system includes the value chains of a firm's supplier (and their suppliers all the way back), the firm itself, the firm distribution channels,
and the firm's buyers (and presumably extended to the buyers
of their products, and so on).
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Value chain - Significance
1 Capturing the value generated along the chain is the new approach taken by many
management strategists. For example, a manufacturer might require its parts suppliers
to be located nearby its assembly plant to minimize the cost of transportation. By
exploiting the upstream and downstream information flowing along the value chain, the
firms may try to bypass the intermediaries creating new business models, or in other
ways create improvements in its value system.
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Value chain - Significance
1 Value chain analysis has also been successfully used in large petrochemical plant maintenance organizations to show how work selection, work planning, work scheduling and finally work execution can (when considered
as elements of chains) help drive lean approaches to maintenance. The Maintenance Value Chain approach is particularly successful
when used as a tool for helping change management as it is seen as more user-
friendly than other business process tools.
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Value chain - Significance
1 A value chain approach could also offer a meaningful alternative to
evaluate private or public companies when there is a lack of publicly
known data from direct competition, where the subject company is compared with, for example, a
known downstream industry to have a good feel of its value by building
useful correlations with its downstream companies.
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Value chain - Value Reference Model
1 A Value Reference Model (VRM) developed by the trade consortium
Value Chain Group offers a proprietary information model for
value chain management, encompassing the process domains of product lifecycle management|product development, customer
relationship management|customer relations and supply chain
management|supply networks.https://store.theartofservice.com/the-value-chain-toolkit.html
Value chain - Value Reference Model
1 The Value Chain Group claims VRM to be next generation Business process
management|Business Process Management that enables value
reference modeling of all business processes and provides product
excellence, operations excellence, and customer excellence.
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Value chain - Value Reference Model
1 Six business functions of the value chain:
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Value chain - Value Reference Model
1 This guide to the right provides the levels 1-3 basic building blocks for
value chain configurations. All Level3 processes in VRM have input/output
dependencies, metrics and practices. The VRM can be extended to levels
4-6 via the Extensible Reference Model schema.
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International Institute for Management Development - IMD Global Value Chain Center
1 The IMD Global Value Chain 2020 Center is a consortium initiative with
corporations to explore and develop future best practices in business models and value chains. The research program
centers on twelve strategic questions derived from megatrends that have changed value chains over the last
decade as well as new megatrends that will dominate in the next decade.
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Private sector development - Business linkages and value chain development
1 Value Chain Development thus seeks to maximise the value of any given type of product, whilst incurring the least possible cost to the producers, in the places along the production chain that give the most benefit to
poor people
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Global Value Chain
1 In development studies, the concept of a value chain has been used to analyse international trade
in global value chains which comprises “the full range of activities that are required to bring a
product from its conception, through its design, its sourced raw materials and intermediate inputs, its marketing, its distribution and its support to the
final consumer”.http://www.globalvaluechains.org/concep
ts.html Specifically, when activities must be coordinated across geographies, the term 'global
value chain' (GVC) is used in the development literature.
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Global Value Chain - In development
1 In his early work based on research on East Asian garment firms, the
pioneer in value chain analysis, Gary Gereffi, describes a process of almost ‘natural’ learning and upgrading for
the firms that joined GVCs.Gereffi, G., (1994)
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Global Value Chain - In development
1 Governance and Upgrading: Linking
Industrial Cluster and Global Value Chain
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Global Value Chain - Current research on governance and its impact from a development perspective
1 It calls for donors and governments to work together to assess how aid
flows may affect power relationships.Jodie Keane, 2014, Aid for trade and Global Value Chains:
Issues for South Asia, http://www.sawtee.org/publications/P
olicy-Brief-26.pdf
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Global Value Chain - Current research on governance and its impact from a development perspective
1 Current research suggests that GVCs exhibit a variety of characteristics and
impact communities in a variety of ways. In a paper that emerged from the
deliberations of the GVC Initiative,Gary Gereffi, John Humphrey, and Timothy
Sturgeon, “The governance of global value chains,” Review of International Political
Economy, vol. 12, no. 1, 2005 five different GVC governance patterns were identified:
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Global Value Chain - Current research on governance and its impact from a development perspective
1 (2010), The Role of Standards in Global Value Chains and their Impact on Economic and Social Upgrading, Policy Research Paper 5396, World
Bank
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Global Value Chain - Current research on governance and its impact from a development perspective
1 (2011) “The Impact of Operating in Multiple Value Chains for Upgrading: The Case of the Brazilian Furniture
and Footwear Industries” World Development Vol
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Global Value Chain - Summary of Unctad report: Global Value Chains and Development
1 The relative ease with which the Value Chain Governors can relocate their production (often to lower cost
countries) also create additional risks.
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Knowledge value chain
1 As an example, the components of a research and development project form a knowledge
value chain.
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Knowledge value chain
1 Productivity improvements in a knowledge value chain may come from knowledge integration in its original sense of data systems consolidation.
Improvements also flow from the knowledge integration that occurs when knowledge
management techniques are applied to the continuous improvement of a business process
or processes.[http://www.edgeltd.com/performance
-consultants-services/edge_service.php?service=3 Canada Edge Performance
Consultants] - official page
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Knowledge value chain
1 783ndash;794(12)Tim Powell, Knowledge Value Chain, May 2001, Proceeding of 22nd National Online
Meeting, Information Today ([http://www.knowledgeagency.com/pdf_center/Knowledge_Value_Chain.pd
f pdf)] It was registered as a trademark in 2004 by TW Powell Co.,
a Manhattan company.[http://www.knowledgeagen
cy.com TW Powell Cohttps://store.theartofservice.com/the-value-chain-toolkit.html
Agricultural value chain
1 The 'agricultural value chain' concept has been used since the beginning of the millennium, primarily by those working in agricultural development in Developing country|developing countries. Although
there is no universally accepted definition of the term, it normally refers to the whole range of goods and services necessary for an agricultural product to move from the farm to the final customer or consumer.
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Agricultural value chain - Background
1 The term value chain was first popularized in a book published in 1985 by Michael Porter, who
used it to illustrate how companies could achieve what he called “competitive advantage”
by adding value within their organization. Subsequently the term was adopted for
agricultural development purposes and has now become very much in vogue among those working in this field, with an increasing number of bilateral and multilateral aid organisations
using it to guide their development interventions.
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Agricultural value chain - Background
1 However, this “vertical” chain cannot function in isolation and an important aspect of the value chain approach is
that it also considers “horizontal” impacts on the chain, such as input
and finance provision, extension support and the general enabling
environment
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Agricultural value chain - Definitions
1 Indeed, some agencies are using the term without having a workable definition or definitions and simply redefined ongoing activities as
“value chain” work when the term came into vogue.[http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---ifp_seed/documents/publication/wcms_170848.pdf Andreas Stamm and Christian von Drachenfels “Value Chain
Development: Approaches and activities by seven UN agencies and opportunities for interagency cooperation” ILO] Published definitions include the World Bank’s “the term ‘’value chain’’ describes the full
range of value adding activities required to bring a product or service through the different phases of production, including procurement of
raw materials and other inputs”, United Nations Industrial Development Organization|UNIDO’s “actors connected along a chain
producing, transforming and bringing goods and services to end-consumers through a sequenced set of activities”, and International Center for Tropical Agriculture|CIAT’s “a strategic network among a
number of business organizations”.
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Agricultural value chain - Definitions
1 Without a universal definition the term “value chain” is now being used to refer to a range of types of chain,
including:
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Agricultural value chain - Definitions
1 * An international, or regional commodity market. Examples could
include “the global cotton value chain”, “the southern African maize value chain” or “the Brazilian coffee
value chain”;
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Agricultural value chain - Definitions
1 * A national or local commodity market or agricultural marketing|marketing system such as “the
Ghanaian tomato value chain” or “”the Accra tomato value chain”;
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Agricultural value chain - Definitions
1 * An extended supply chain or marketing channel, which embraces all activities needed to produce the
product, including information/extension, planning,
input supply and finance. It is probably the most common usage of
the value chain term;
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Agricultural value chain - Definitions
1 * A dedicated chain designed to meet the needs of one or a limited number of buyers. This usage, which is arguably most faithful to Porter’s concept, stresses that a value chain is designed to capture value for all
actors by carrying out activities to meet the demand of consumers or of a particular
retailer, processor or food service company supplying those consumers. Emphasis is firmly placed on demand as the source of
the value.https://store.theartofservice.com/the-value-chain-toolkit.html
Agricultural value chain - Value chain methodologies
1 The proliferation of guides has taken place in an environment where key
conceptual and methodological elements of value chain analysis and
development are still evolving
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Agricultural value chain - Linking farmers to markets
1 Unilever operates tea estates and tea processing facilities in Kenya and
then blends and packs the tea in Europe before selling it as Lipton,
Brooke Bond or PG Tips brands), the great bulk of agricultural value
chains involve sales to companies from independent farmers
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Agricultural value chain - Linking farmers to markets
1 Work to promote market linkages in developing countries is often based on the concept of “inclusive value
chains”, which usually places emphasis on identifying possible
ways in which small-scale farmers can be incorporated into existing or
new value chains or can extract greater value from the chain, either by increasing efficiency or by also
carrying out activities further along the chain.
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Agricultural value chain - Agricultural value chain finance
1 Also falling under value chain finance are asset collateralization, such as on the basis of warehouse receipts, and
risk mitigation, such as forward contracting, futures and insurance.
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Agricultural value chain - The use of ICTs in value chains
1 Applications such as M-Pesa can support access to mobile payment services for a large percentage of
those without banks, thereby facilitating transactions in the value
chain
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Agricultural value chain - Enabling environments
1 Many measures to improve value chains require collaboration between a wide range of different ministries, and this can be difficult to achieve.
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Corporate strategy - Value chain
1 By aligning the various activities in its value chain with the
organization's strategy in a coherent way, a firm can achieve a competitive advantage
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Corporate strategy - Value chain
1 Each of these activities can contribute to a firm's relative cost
position and create a basis for differentiation...the value chain
disaggregates a firm into its strategically relevant activities in
order to understand the behavior of costs and the existing and potential
sources of differentiation.
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Virtual value chain
1 It supports the physical value chain of procurement, manufacturing,
Distribution (business)|distribution and sales of traditional companies.
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Virtual value chain
1 The value chain is separated into two chains because the marketplace (physical) and the marketspace (virtual) need to be managed in
different ways to be effective and efficient (Samuelson 1981)
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Virtual value chain - New developments lead to new strategies
1 In the last decade the advancement of IT and the development of various concepts in manufacturing, such as
'just In time (JIT) have led to the situation where businesses no longer focus purely on the physical aspect
of the value chain as the virtual value chain became equal in
importance.
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Virtual value chain - New developments lead to new strategies
1 Michael Porter, creator of the value chain concept, stated that no value is added by the Internet itself, however the Internet should be incorporated into the business’ value chain. As a result the Internet affects primary activities and the activities that
support them in numerous ways. Porter describes the value chain in
the following:https://store.theartofservice.com/the-value-chain-toolkit.html
Virtual value chain - New developments lead to new strategies
1 “The value chain requires a comparison of all the skills and
resources the firm uses to perform each activity.”
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Virtual value chain - New developments lead to new strategies
1 In the virtual value chain (VVC), information became a dynamic element in the formation of a business’ competitive advantage. The
information is utilized to generate innovative concepts and ‘new knowledge’. This
translates to new value for the consumer. The VVC model reveals what function they have in the chain. If they are not currently offering information-based services (i.e.
Internet services), how they can make the transition.
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Virtual value chain - Stages of the value adding information process
1 # Visibility—By using information, businesses learn the ability to view
physical operations more effectively. This means that the foundation for
the virtual value chain is used to co-ordinate the activities of the physical
value chain. Furthermore, with the assistance of IT, it is then fully
possible to plan, implement, and assess events with greater precision
and speed.https://store.theartofservice.com/the-value-chain-toolkit.html
Virtual value chain - Stages of the value adding information process
1 # Mirroring capability—Businesses recreate their once-physical activities
for virtual ones by producing a parallel value chain in the
marketspace. In other words, the business moves the value-adding activities from the marketplace to
the virtual marketspace.
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Virtual value chain - Relevance to the business world
1 The virtual value chain offers a view that encompasses the entire network along with its employment of IT. The VVC model has a relationship to the
supply chain and the goal of that relationship is to produce materials, information and knowledge for the
market. IT maintains the relationship among the members of the chain.
The VVC model does not indicate any shifts in the market, or how and when the customer’s needs will
change.
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Virtual value chain - Relevance to the business world
1 New technological developments in IT are drastically changing the way businesses operate. Virtual business’s internal and
external relationships are managed by IT and value adding and generation of ideas
are relying more and more on IT. This trend has led to a different approach to value
chain thinking. Using this approach Mary Cronin separates the VVC into three
elements: inputs from supplier, internal operations, and customer relations.
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