Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


Critical Evaluation of Value Chain Analysis for Assessing Competitive Advantage-A Study on Select Companies of E-Tailing Industry

Author(s): Abdul Razak, Kishore Vattikoti

Porter's Value Chain analysis is a useful strategic management tool. Value chain analysis works by breaking an organization's events and activities down into strategically appropriate pieces, so that it can have a complete picture of the cost drivers and sources of differentiation and after that can make changes accordingly. E-tailing companies in India are suffering from the effects of competition condition in the internal markets, because these companies don’t apply value chain analysis to achieve and sustain competitive advantage which leads to strategic competitiveness, and still depending on using traditional cost analysis in achieving competitive advantage. A value chain is a set of activities and accomplishments that an organization carries out to create value for its customers. The companies are purely depending on logistics and supply chain management. Taking from acquiring raw materials to making the products reach the ultimate customers, there are many processes and people are involved. This should be done without interruption and more care should be taken. The companies get into Value chain analysis in creating value to customers and achieving competitive edge over others. The more value an organization creates, the more profitable it is likely to be. And when the organization provides more value to its customers, it builds competitive advantage. Organizations strive hard to create value to its customers. The point of understanding how the organizations create value and looks for means and methods to add more value are critical elements in developing a competitive strategy. Many organizations lack in planning and implementing Value Chain analysis. In the present study, the researcher is going to study on how value chain analysis helps in creating competitive edge over others and leads to build competitive advantage.