Business Process (Re)engineering

Strategy Insights

Value Chain Analysis - Do you ask yourself regularly whether your business value added will be sustainable in the long run?

Or do you know whether alternative value chains might take over your business, simply because they create a higher value to your customers? Or maybe they are able to offer the same at a lower price! The value chain analysis is a strategic exercise providing you the answers to these and other business relevant questions.

For a starter, value chains are everywhere and constantly changing, especially since digitalization is enabling durable networking relationships that were simply not possible 10 years ago. Just think of Uber, Airbnb or Amazon. They exist on a local, interregional, and increasingly at a global level. But they also exist at a micro level, such as distribution channel, company, business unit and product level. And they are all influencing the profitability of your business, today tomorrow and in the long run.

The main goal of the value chain analysis is to recognize which activities are the most valuable (i.e. are the source of cost or differentiation advantage) and which ones could be improved.

Originated in the 1980s by Michael Porter, value chain analysis is a conceptual expression of value-added in the form of a value chain. Porter suggested that an organisation is split into 'primary activities' and 'support activities'.

Example E-commerce Value Chain Consumer Electronics Aftermarket 

Value chain analysis provide very useful insights of how the links of the chain are knotted together and what level of added value they are creating, as such that the value chain as a whole creates a sound profit margin. In other words, if a value chain runs efficiently the aggregated value should exceed the overall costs while customers are interested to pay a premium for the result.

Business Process Design & Implementation

Business process re-engineering (BPR) is a business management practice, originating from the early 1990s, focusing on the analysis and design of workflows and business processes within an organization. BPR aims to help organizations to align their business processes with the customer experience journey, while improving the efficiency and effectiveness of their operational performance by using information technology.

Business process reengineering is also known as business process redesign, business transformation, or business process change management. BPR seeks to help companies radically restructure their organizations by focusing on the ground-up design of their business processes. According to Davenport (1990) a business process is a set of logically related tasks performed to achieve a defined business outcome. Re-engineering emphasized a holistic focus on business objectives and how processes related to them, encouraging full-scale recreation of processes rather than iterative optimization of sub-processes.