The Internal Value Chain Model

The Internal Value Chain Model

To discover development opportunities and generate value for consumers, firms can use the Internal Value Chain Model to assess and understand their internal processes and activities, from procurement to customer service. It is a methodical technique for looking at every stage of the value creation process within a business and assessing how successfully and efficiently it is carried out. This model has two objectives: finding areas for change and improving current operations. Organizations can proactively adapt to market demands, technological advancements, and competitive pressures by identifying areas for change.

For starters, the Internal Value Chain Model enables firms to pinpoint areas where they might alter their current practices to boost overall performance. Organizations can find bottlenecks, inefficiencies, or gaps that might impede the supply of value to clients by segmenting the value chain into its major and supporting operations (Czachorowski et al., 2023). Organizations can use this study to find chances for innovation, process improvement, cost cutting, or quality improvement. Also, organizations can strengthen their competitive advantage and better serve consumer requirements by implementing strategic changes to their operations based on the knowledge gathered from the value chain analysis.

The Internal Value Chain Model, however, is not just concerned with altering what firms do; it also seeks to improve upon what they are presently doing. Organizations can locate best practices and areas of excellence within their operations by carefully reviewing each value chain stage. As a result, businesses can reproduce their internal successes across several departments or roles. Nayal et al. (2021) also note that organizations can improve their operational effectiveness, raise customer satisfaction, and achieve sustainable growth by aiming for continuous improvement within their current processes and activities.

References

Czachorowski, K. V., Haskins, C., & Mansouri, M. (2023). Minding the gap between the front and back offices: A systemic analysis of the offshore oil and gas upstream supply chain for framing digital transformation. Systems Engineering. https://doi.org/10.1002/sys.21652

Nayal, K., Kumar, S., Raut, R. D., Queiroz, M. M., Priyadarshinee, P., & Narkhede, B. E. (2021). Supply Chain Firm Performance in Circular Economy and Digital Era to Achieve Sustainable Development Goals. Business Strategy and the Environment, 31(3). https://doi.org/10.1002/bse.2935

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The Internal Value Chain Model

Review the Internal Value Chain Model discussed in Chapter 2 of your textbook. Considering all aspects seen within an organization’s internal value chain what is the goal of using this tool? Are we looking to change what we are doing, or are we looking for ways to be better at what we are already doing? Why? Please provide a detailed rationale with at least one supporting reference for this DQ.