A01 chaf6542 06 se fm indd

(a)

(b)

Secondary value chain activities

Finance

Information systems

Outbound

 logistics

Sales

and

marketing

Procure

products

Manage

selling and

fulfilment

New value chain models

‘The traditional value chain model 

of Michael Porter (Figure. 6.8(a)) is 

no longer useful as a framework for 

value chain management. Instead, 

Figure 6.8(b) is more appropriate.’

Debate 6.1

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Part 2  Strategy and applications

strategy will be refined and at the same time steps can be taken to obtain the resources and 

production processes necessary to create, store and distribute the new product. Through 

analysis of the value chain and looking at how electronic communications can be used to 

speed up the process, manufacturers have been able to significantly reduce time to market 

from conception of a new product idea through to launch on the market. At the same time 

the use of technology increases value chain efficiency.

Electronic commerce also has implications for whether value chain activities are achieved 

internally or externally. These changes have been referred to as value chain disaggregation 

(Kalakota and Robinson, 2000) or deconstruction (Timmers, 1999) and value chain reaggre-

gation (Kalakota and Robinson, 2000) or reconstruction (Timmers, 1999). Disaggregation 

can occur through deconstructing the primary activities of the value chain and approach‑

ing the elements in a new way. In reaggregation the value chain is streamlined to increase 

efficiency between each of the stages. Indeed, Timmers (1999) notes that the conventional 

wisdom of the value chain as a separate series of discrete steps may no longer be tenable as 

steps such as inbound logistics and operations become more tightly integrated through tech‑

nology. We have only touched upon changes to the structure of the value chain here, since 

there is great similarity with the changes possible in the structure of the supply chain. This 

is evaluated in more depth in the sections on vertical integration and models for redefining 

the value chain.