A Theoretical Analysis of Leveraging Competitive Advantage Through Physical and Virtual Value Chain Interaction.
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Contents.
1. Introduction.
2. The Value Chain.
3. Superior Value.
4. Content, Context and Infrastructure.
5. Strategic Considerations.
6. Marketing.
7. Interaction.
8. Conclusion.
9. References.
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1. Introduction.
Using "chain" as a metaphor for accomplishing a set of inter-linked tasks to achieve a predetermined end result is not new (Van Dalen, 1997). One of the first graphical representations of how interdependent operations can be coordinated to provide a final product or service that has greater value than the sum of the parts was the value chain (Porter, 1980). Since that time much work has been undertaken to build upon Porter's theories surrounding how organisations can develop a sustainable competitive advantage.
Arguably the most radical redefining of Porter's original value chain model was by Hines (1994). While reversing the direction of Porter value chain initially appears only cosmetic, the principle it highlights is something Porter's model missed and which is critical to organisation's success. Hines hypothesized that unless procedures performed in a chain provided end-customer recognised value, organisation(s) could not achieve a sustainable competitive advantage.
Hines" redefined value chain also promoted that elements initially seen as supporting organisations" operations were in fact critical to their performance. Information Technology (IT) and the effective use of information are such elements. The work by Rayport and Sviokla (1994/95/96), which provides the core of this analysis, further highlighted the importance of information to maximising customer-recognised value by better coordinating the inter-linked operations of a chain. They theorised that the power of information is such that it provides opportunities for organisations to establish a virtual value chain in addition to any pre-existing physical value chains.
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