Reference no: EM131013478

You are familiar with the value chain as a vehicle for describing organizational business processes and the relationships between these processes (more on this later in the course). However, the "value chain" configuration is increasingly inadequate as a means to describe how an organization organizes and operates to meet the needs of customers. The term value configuration, as described below, may provide a clearer way to communicate and think about modern organizations. Value configurations, such as the Value Chain, are based on three generic "organizational technologies:" Long-linked - sequential interdependencies, serial tasks, continuous output of standardized products, clear criteria for capital and labor selection (i.e., a traditional Value Chain configuration) Intensive - for use in solving highly specific problems in an iterative fashion (a Value Shop) Mediating - these technologies facilitate intermediary services; focus is on standardized criteria and decision making and scale of operations (a Value Network) The Value Chain is a value configuration (or value creation logic) that is most appropriately applied to manufacturing and product-oriented businesses. In light of the growing service and digital economies, other models are needed to explain value creation for competitive advantage. BY CONFIGURATION: Value Chain · Focus is on efficiency, process and lowering cost · Disintermediation is a possibility for both logistics and procurement