Michael Porter published the Value Chain Analysis in 1985 as a
response to criticism that his Five Forces framework lacked an implementation methodology
that bridged the gap between internal capabilities and opportunities in the competitive
landscape. This framework focused on industry attractiveness as a determinant of
the profit potential of all companies within that particular industry. However,
significant differences in performance exist between companies operating within
the same industry that can be explained either by the company's participation in
a successful strategic group or by a firm's specific competitive advantages.
By subdividing an organization into its key processes or functions, Porter was able
to link classical accounting to strategic capabilities by using value as a core
concept, i.e. the ways a firm can best position itself against its competitors given
its relative cost structure, how the composition of the value chain allows the firm
to compete on price, or how this composition allows the firm to differentiate its
products to specific customer segments.
Lucintel provides complete visibility to the value chain of a market from material
suppliers to the end customer. For each node of the value chain, we identify industry
profitability, attractiveness, competition, trends and opportunities. We interview
customers, suppliers and competitors at each node of the value chain to get clear
picture on the health of the market and thus provide you near real-time strategic
insights and intelligence so that you make confident business decisions.