Adding Value To identify these competitive advantages, Michael Porter created value chain analysis, which views a firm as a series of business processes that each add value to the product or service. Value chain analysis is a useful tool for determining how to create the greatest possible value for customers.
The goal of value chain analysis is to identify processes in which the firm can add value for the customer and create a competitive advantage for itself, with a cost advantage or product differentiation. Starbucks has hired you after your graduation for a temporary position that could turn into a fulltime opportunity.
With new cafés and juice shops popping up on every corner, coupled with the global recession, Starbucks is worried about losing market share to competitors. Your boss, Heather Sweitzer, is out of ideas for ways to improve the company's profitability. You decide that one of the most useful tools for identifying competitive advantages is Porter's value chain analysis.
Of course, you do not yet have the detailed knowledge to complete all of the elements required, but you know enough to get started and plan to take your draft to Sweitzer next week. Using your knowledge of Starbucks, create a value chain analysis. Feel free to make assumptions about operations; just be sure to list any that you make. Also, be sure to write an overview of the tool and its potential value so Sweitzer can understand how it works.