VALUE CHAIN: A CONCEPTUAL FRAMEWORK

1 , (1) 2016:74-77 ISSN 2229-600X74 VALUE chain : A CONCEPTUAL FRAMEWORK *Dilip Kumar&RajeevP. of Management Studies,Banaras Hindu University, Varanasi-221005, Uttar Pradesh, India*Corresponding Author objective of this article is to deepen the understanding of the VALUE concept as well as to enlighten the role of valuetocreate a chain which provides a basic FRAMEWORK for the development of goods or services. Any VALUE adding activities or strategywhichenlightenthecustomer VALUE chainis one of the recent and most popular trends to days. The concept ofvalue in VALUE chain is multifaceted and complicated. This article focusing on efforts and commitment to understand really whatit means to provides VALUE to customers, how added VALUE which actuallycustomers needs and provides wealth to all stakeholderswho is no any specific ways to add VALUE in goods or services but it emphasized the ways which minimize costandtime withoutcompromisethe quality of the products in aneffective and efficient tosummarizefew availableliteratureswhichgavea little glimpse of VALUE chain and its necessity for survival of the company andhow tofulfill theactualneeds and demands of the customersin present.

2 VALUE , VALUE chain , Strategy,Differentiation, (1969) stated that "By VALUE , is to be understand theprice of things;that, whatanything is worth to be sold"at thattime VALUE is totally depends upon itcost but Coyle et al(1996) stated"An important consideration is that VALUE mustbe viewed from the customer's perspective, because it is valueto the customer that is most important. The VALUE is conditionwhich motivates the people and very across culture and whichemphasizes the needs, requirement, wishes and ultimatedemands of the is no any comprehensiveand complete definition of VALUE and so many people failed todefine and Jantrania(1995).Porter (1985) gavehis statement about VALUE that " VALUE is the amount buyers arewilling to pay for what a firm provides ChainMichael Porter was the first person who introduced the term VALUE chain in his book Competitive advantage: Creatingand Sustaining Superior Performance (Porter 1985).

3 MichaelPorter defines VALUE chain as a representation of a firm svalue-adding activities, based on its pricing strategy and coststructure. The ability of any firm to understand its owncapabilities and the needs of the customer is crucial forcompetitive strategy to be first steps inconducting the VALUE chain analysisare to break down the keyactivities which involve in the frame work. The next stepsareto assess the potential for adding VALUE through the means ofcost advantage or differentiation. Finally, it is very importantfor the analyst to determine the strategies that focus on thoseactivities that would enable the company to attain sustainablecompetitive advantages.

4 The profitability of a firm dependson how effectively it manages the various activities in valuechain; price that the customer is willing to pay for thecompany products and services exceeds the relative cost ofthe VALUE chain chains encompass the full range of activities andservices required to bring a products or services from itsconception to sale in its final market whether local, national,international or global. VALUE chainincludesproducers,inputssuppliers,o peration,processors, retailersand buyers. Theyare supported by a range of technical, business and financialservices providers. (USAID,Briefing Paper) AValue chain Analysis is an alliance of enterprisescollaborating vertical to achieve a more rewarding positionin the market.

5 The VALUE chain mainly focuses on the market collaboratingstrategy, where it emphasized the linkages betweenproduction, marketing etc. activities of the products andservices in an effective and efficient manner. Verticalalignment is also an important aspect where companiesconnect one end of the primary activities up to the last end ofthe supportive activities, at each stage of the products whichto increasesvalue. A VALUE chain in its simplest form is a collaborative effort .. Jerry bournaDavid Hughes said that Consumers will look for attributes orbenefits in the food product rather than price alone. It will beessential to identify these elements and build them into yourvalue chain for mutual chain has bothValue chain : Aconceptual framework75structural anddynamic components in which the structure ofthe VALUE chain influences the dynamics of firm behavior andthis dynamic persuade how well the VALUE chain chain structure includes the five elements like endmarket, Business and enabling environment, vertical linkages,supporting market and horizontal markets aretheir own role in the VALUE chain structure and it represents thelast user of the products or services not a physical markets.

6 Itplays a significant role in determining the quality, quantities,prices and timing for the success of the product or services forany firms and it also helps to create a demand for the types of policies, trade agreement, rules &regulation and infrastructure scarcity which creates barriersandits availability helps in smoothening the progress of thevalue chain of the products or services at the local, nationaland international level. There are many factors helps inmarket expansion in which trade agreement and qualitystandards are there, which has considerable role in the marketexpansion but it has very much valuable for the MSME sfirms.

7 Some of the rule or regulation which was made at thelocal level has a great role for influencing the competitivelevel of the linkage between the firms also affectsthe VALUE chain of the products or services. The vertical chainof the firms is most efficient transaction which increases theoverall competitiveness of the firms. The support market hastheir own role for the making of the VALUE chain more efficientin which it includes a legal advices & telecommunicationsectors specifics services, handicraft design etcIt is a continuous process which adds VALUE to its chain whichstarted from customer s needs and demands to reach up to theinput activities of the primary needs ofvalue addition in each stage which help to differentiate it fromits competitors at a cheaper rate with best qualityThe researchersbelievethat customers is the ultimate goal ofan enterprise whichinfluence them to create such an uniquearticle which fulfill their desiredwhich help by supply chainto providesit in an efficient manners.

8 Willingness of thecustomers plays a significant role to give direction to thestrategic formulating bodies to give preference beforemanufacturing of their products and 1 Michael Porter s VALUE chain ModelREVIEW OF LITERATUREV alue chain analysis has been influenced by both internal andexternal forces which help to study each and every aspect ofthe industry or internal forces are production,marketingetc. andexternal forces such as technological,ecological, economic, new industry trends and information technologyhasalso play veryimportant role to update the manufacturing process of chung (2008)found that there hasbeen a strong relationship between thequality had conducted a study based on 15 National QualityAwards winning enterprises in Taiwan.

9 During his studies hefound that awards winning enterprise focused more on qualityimprovement in their products and those enterprises that havebeen working ontheir quality improvementhas their greatchance to increase their business meaning of VALUE started sifting towards customer/consumers -drivenrather than financial oriented perspective. The global valuechain FRAMEWORK focusedon the natureandcontent oftheinter-firm linkage, andpower that regulates VALUE chainsynchronizationprimarilybetween buyers and firm few tiersof supply(Gary Gereffi, John Humphrey 2005). VALUE chainis a robust methodology for exploring various aspects of theeconomy-environment interface and a useful complement tomaterial flow or life cycle analysis with a potentially verywidespread applicability.

10 The VALUE chain analysis alsoprovides a FRAMEWORK for coherent and integrated response byindustry as well aspolicy makers, through its focus on linkagewithin the different stages and actors in a chain ( Paul, 2005).The significance of VALUE managementfromclient s pointof view,for an organizationis a , (1) 2016:74-77 ISSN 2229-600X76important indication through which, they easilymanufacturing the products according to the customers tried to understand the importance of VALUE with thehelp of five tools-issue analysis, clients VALUE system,timeline, functional analysis and REDRess analysis werehelpful for the participant to known or identifying orclarifying the clients requirementdescribesby(Ann.)