The Value Chain

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The Value Chain
Support activities
Primary activities
Inbound logistics Materials receiving, storing,
and distribution to manufacturing
premises Operations Transforming inputs into
finished products. Outbound logistics Storing
and distributing products Marketing and
Sales Promotions and sales force Service Servic
e to maintain or enhance product value Corporate
infrastructure Support of entire value chain,
e.g. general management planning, financing,
accounting, legal services, government affairs,
and QM Human resources management Recruiting,
hiring, training, and development Technology
Development Improving product and manufacturing
process Procurement Purchasing input
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Crafting the Network Economy Business Model
Concept describes the opportunity and strategy
Value Measures the benefits to investors and
other stakeholders
Capabilities define resources needed to execute
strategy
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Crafting the Network Economy Business Model
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Building the Networked Business

• ABB is an organization with three internal
  contradictions. We want to be global and local,
  big and small, radically decentralized with
  centralized reporting and control. If we resolve
  those contradictions, we create real competitive
  advantage
• Percy Barnevik, CEO Asea Brown Boveri (ABB)

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Extend Enter into a new line of business and/or
add new business model
Enhance Add functionality or features to current
product/services offering or improve performance
of existing business
Exit Exit a business or market or drop a
product/service offering
Expand Add new product/service offering or enter
new geographic market