Value chain

About: Value chain is a research topic. Over the lifetime, 7206 publications have been published within this topic receiving 224183 citations.

Porter's Diamond Framework in a Mexican Context

Abstract: * The Porter diamond model has been widely used as a basis for examining international competitive strategies. This article examines the ways in which Mexico is linking itself to the U.S. economy via a double diamond. * The strategies of Mexico's leading clusters--petrochemicals and automobiles--are considered within the double diamond framework. Key words * A double diamond model is already being used by Mexican corporations to both create and sustain economic progress. Porter Revisited Porter's "diamond" model is well-known to both researchers and practitioners. In way of reprise, the model is based on four country-specific determinants and two external variables. These include: 1. Factor conditions such as: (a) the quantity, skills, and cost of personnel; (b) the abundance, quality, accessibility, and cost of the nation's physical resources; (c) the nation's stock of knowledge resources; (d) the amount and cost of capital resources that are available to finance industry: and (e) the type, quality, and user cost of the nation's infrastructure. 2. Demand conditions such as: (a) the composition of demand in the home market: (b) the size and growth rate of the home demand; and (c) the mechanisms through which domestic demand is internationalized and pulls a nation's products and services abroad. 3. Related and supporting industries such as: (a) the presence of internationally competitive supplier industries that create advantages in downstream industries through efficient, early, or rapid access to cost-effective inputs; and (b) internationally competitive related industries which can coordinate and share activities in the value chain when competing or those which involve products that are complementary. 4. Firm strategy, structure, and rivalry such as: (a) the ways in which firms are managed and choose to compete; (b) the goals that companies seek to attain as well as the motivations of their employees and managers; and (c) the amount of domestic rivalry and the creation and persistence of competitive advantage in the respective industry. The two outside forces, also affecting the competitiveness of a nation, but not direct determinants, are these: 1. The role of chance as caused by developments such as: (a) new inventions; (b) political decisions by foreign governments; (c) wars; (d) significant shifts in world financial markets or exchange rates; (e) discontinuities in input costs such as oil shocks; (f) surges in world or regional demand; and (g) major technological breakthroughs. 2. The various roles of government including: (a) subsidies; (b) education policies; (c) actions toward capital markets; (d) the establishment of local product standards and regulations; (e) the purchase of goods and services; (f) tax laws; and (g) antitrust regulation (Porter, pp. 69-130). Figure 1 provides an illustration of the complete system of these determinants and external variables. As can be seen, each determinant affects the others and all, in turn, are affected by the role of chance and government. [FIGURE 1 OMITTED] Critique and Evaluation of the Porter Model In applying Porter's model to international business strategy, it is important to realize eight key facts. First, the government is of critical importance in influencing a home nation's competitive advantage. For example, it can use tariffs as a direct entry barrier to penalize foreign firms, and it can employ subsidies as an indirect vehicle for penalizing foreign-based firms. However, the problem with government actions such as these is that they can backfire and end up creating a "sheltered" domestic industry that is unable to compete in the worldwide market (Rugman and Verbeke 1990). Second, while chance is a critical influencing factor in international business strategy, it is extremely difficult to predict and guard against. …

Spanning flexibility: supply chain information dissemination drives strategy development and customer satisfaction

Abstract: Purpose – To respond to an increasingly uncertain environment, firms are seeking to enhance flexibility across the value chain. Spanning flexibility, a critical dimension of value chain flexibility, is the ability of a firm to provide horizontal information connections across the value chain to meet a variety of customer needs. This research organizes literature on spanning flexibility and classifies it according to competence and capability theory.Design/methodology/approach – The study collected data from 273 manufacturing executives related to spanning flexibility. The instruments used to collect these data have been validated via literature review and structured interviews with executives. Structural equation modeling was applied to these data to test relationships among the variables in the study.Findings – This study develops valid and reliable instruments to measure the sub‐dimensions of spanning flexibility. The results indicate strong, positive, and direct relationships between flexible spanning ...

Managing Costs and Cost Structure throughout the Value Chain: Research on Strategic Cost Management

Abstract: Strategic cost management is deliberate decision making aimed at aligning the firm's cost structure with its strategy and optimizing the enactment of the strategy. Alignment and optimization must comprehend the full value chain and all stakeholders to ensure long-run sustainable profits for the firm. Strategic cost management takes two forms: structural cost management, which employs tools of organizational design, product design, and process design to build a cost structure that is coherent with strategy; and executional cost management, which employs various measurement and analysis tools (e.g., variance analysis and analysis of cost drivers) to evaluate cost performance. In this chapter, I develop a model that relates strategic cost management to strategy development and performance evaluation. I argue that although management accounting research has advanced our understanding of executional cost management, other management fields have done more to advance our understanding of structural cost management. I review research in a variety of management fields to illustrate this point. I conclude by proposing that management accounting researchers are uniquely qualified to create a body of strategic cost management knowledge that unifies structural and executional cost management.

How to design the right supply chains for your customers

Abstract: Purpose – This paper aims to present an approach that two leading supply chain companies have used to identify and design alternative supply chain solutions according to their customers' demand chainsDesign/methodology/approach – The paper describes industry best practiceFindings – The supplier of telecommunications equipment found that by deploying three different supply chains that corresponded to three types of customers' demand chains it could simultaneously improve customer satisfaction and effectiveness The supplier of fasteners found it could serve its different industrial customers with essentially two supply chain designsResearch limitations/implications – This is a practical best practice description and does not aim to contribute to academic research However, there are no academic contributions on procedures for supply chain re‐design according to customer demand chains Thus, the best practice described in the paper implies a need for research on this type of supply chain customizationPr

Examining the interrelationships between supply chain integration scope and supply chain management efforts

Abstract: In this article, we study the concept of supply chain integration scope by comparing firms that involve immediate supply chain partners in their strategic efforts (narrow supply chain scope) versus firms that involve supply chain partners beyond the immediate level, for example second tier suppliers and end customers (broad supply chain scope). By relying on Coordination Theory and expanding upon Frohlich and Westbrook's (2001) ‘arcs of integration’ principle, we propose that supply chain integration scope and the type of supply chain management efforts deployed by firms are correlated. We use data from a large sample of US and European firms to explore the association between supply chain integration scope and supply chain management efforts. The results show that supply chain integration scope can be predicted by a firm's supply chain management efforts. The implications of our results for practising managers are also offered. Our results suggest that supply chain managers should consider the practices ...