The Value Chain As Strategic Tool

The value chain as strategic tool

INTRODUCTION

In this text, the purpose is to expose in general the relationships that exists in the value chain and strategic planning as an important element in the development actions of the companies. To this end, the classic theoretical foundations are based, looking for a relationship with the reality of organizations and companies.

As an important element, investigations from national and international higher education institutions are recognized that since its interest has analyzed business phenomena, organizational trends, as well as the actions that throughout the last 34 years have allowed a monitoring of business growth, as well asLike some failure indicators.

Finally, the reader is invited to allow this text to encourage it in the search for different accompaniment alternatives to Colombian organizations or companies, as well as the autonomous inquiry of the management strategies of strategic planning as one of the tools that alsoIf they are useful in the business framework, they are very relevant when undertaking projects in all existing orders or areas.

DEVELOPING

As mentioned, this text is intended to establish general approaches to the understanding of the value chain in companies as an important element for their strategic processes, in order to generate a relationship of these theoretical and practical bets withthe current organizational context and consequently of the country.

Mainly the construction of the text is based on the theoretical positions of Michel Porter, Marc Gerstein and Igor Ansoff, being those who base the theories of strategic thinking, the value chain and their relationship with organizations at the competitive level of the market. However, it is essential.

Initially and to facilitate the reading process, it is based on the simple definition of the value chain proposed by Michel Porter, for more to continue with the understanding of strategic planning and finally achieve a relationship between the two actions for organizational development. In this sense it is understood that a value chain

“[…] Describes the range of activities that are required to carry a product or service from its conception, passed through the intermediate phases of production and delivery to final consumers and its final disposal after use."2 This includes activities such as design, production, marketing, distribution and support services until you reach the final consumer".

In this order of ideas, it seeks to review all the interventions that must be had for the development of the products or services that they offer and that these really reach the market complying with the expectations of functionality and quality required by the client or user, seeking quantifyAll these interventions of the organization, from the allocation of an economic item, all this in order to identify what are the direct and indirect costs of production so that a competitive price is sought in the market, ensuring that it is accessible to the customer butalso that generates a gain to the organization.

Therefore, a direct relationship of the value chain is established with the prospective thoughts and proposals of organizations directly linked to organizational strategic planning in which it is essential to identify the principles, actions, resources, scope, times and tools that are necessaryto fully comply with the organizational objectives set and mostly declared in the mission and vision of organizations.

In this sense, it becomes an element imports from mentioning and reflecting that strategic planning has a meaning and foundation on guaranteeing

“[…] That at least the policies (but the actions) of the functional departments are coordinated and channeled towards a set of common goals. Porter considers that designing a strategy consists in creating a general formula of how a company is going to compete, what will be its goals and what policies will be required to achieve them." 

Following the previous reference and relating it to the demand of the current market, the challenge for companies or organizations is directly linked not only to generate a permanence in the market, but also, to promote internal and external coherence with the onlyIn order to maintain a positive impact on the sector in which the organization is mainly immersed by the client and/or user.

Therefore, at the time of thinking about the value chain, it is also pertinent to involve figures, projections, financial and budgetary analysis, which become a fundamental axis so that the actions proposed by the companies can be carried out. This is how the strategy can be understood from two main proposals, one understanding it as an intention that is related to the future projection generated by organizations, and in second as a behavioral model fractioning specifically in the actions and reinforcements that must be taken tothe same to achieve the objectives. 

Disaggregating the two previous positions we can identify that the first is directly related to the horizon that is raised to the organization in a prospective sense, requiring that the directives of the same generate avant -garde strategies so that their service or product offer allows us to respond to the needsof the society of the future. On the other hand, the second proposal, being related to behaviorism, focuses on identifying in the present the elements that must be taken into account to achieve a goal accompanying them of a stimulus that allows me to have the desired response, this is how it is closely related tothe analysis of the company in the present or current time in which the organization intervenes.

 Next, a graph is evidenced in which it allows to visualize more easily the elements to take into account when talking about strategic thinking or strategic planning for decision making and addressing, which will later allow a direct relationship with the analysis with the analysisvalue chain as the main theme of this essay.

Source: Taken from strategic management model for decision making in agricultural entities.

The strategy in this sense is a fundamental part of the management actions for the design, monitoring and evaluation of administrative processes. Therefore, the propitious value chain requires for their development that organizations have extensive knowledge of themselves, where not only attention is paid to strengths and opportunities but also to the weaknesses and threats that are possessed within each oneof the areas that make up the organization;In addition to this it is prevailing that it is identified what the history of the organization has been and its state prior to the development of strategic actions and the possibility of market penetration according to the products or services devised as offer.

Speaking of the value chain, we started to mention that it is an original Michel Porter technique mainly aimedAn analysis of the accumulated costs that occur throughout the production processes, hence the value chain “[…] allows the company to decompose in a series of strategically important activities with the objective of understanding the behavior of costsand current and potential sources of differentiation ".

Organizations and companies in general as a current challenge have to stay in force through relevance not only of their services or products, but also because of the relationship they have with the needs of their customers and/or users. In this sense, identifying the value chain in companies and locating its importance in them to achieve the synergy required in each of the areas or spaces that make it up.

When talking about value chain, it is necessary to mention the importance that exists for organizations or companies, know the context to which their products or services respond, part of direct communication with the users or customers to whom the general offer is directed directedof the company.

In relation to the current context, thinking about the value chain to facilitate the impact of companies in the economic sector to which it belongs, and their direct relationship to strategic planning is due to the fact that it is a growing concern of the Colombian State to generate agrowth and longanimity to companies that are gestated in their nation, this because after an exhaustive investigation of the University of Rosario it was found that

“In the organizational field, the main difficulty facing Colombian companies – mostly micro, small and medium -sized – is their low management capacity, which is reflected in the difficulties they have to propose growth and development objectives, and to efficiently manage their resources (human, financial, technological, etc.).”(Sanabria, Saabedra, & Hernández, Page. 6)

Following the previous analysis, it is pertinent

“[…] 60% of emerging companies in Colombia breaks before they turn five years of life, of which 98% are microenterprises. In other words, only 4 out of 10 ventures survive the initial positioning stage in the national market. […] In the first year they tend to disappear between 20% and 30% of nascent companies, so that of the 88406 companies that were registered in the Chamber of Commerce of Bogotá in 2017, at the end of 2018 most likelyThey will close 22100 and, in 2022, completed the five years of existence, only 35362 businesses will continue to work." 

Manifesting in this way that the necessary efficiency and efficiency in the synergy that must exist between the planning and functionality of the organizations is not yet evidenced the implementation, so it is possible to conclude from an analysis to companies that grow above 10% annual that must be included mainly four organizational variables which are “[…] the strategic planning tools, the way in which innovation is developed, the development of new business models and the appropriation of technology, […]” 

In this sense, it is possible to infer that as an important action for all administrative areas is the need to organize Colombian companies organizationally, thus bringing the theoretical elements to practical spaces. In other wordsIn the text, but also a practical action that allows evidence.

Concluding the topic This document has made clear the relevance of establishing strategic planning as a link to the value chain, so these elements when they are judiciously integrated into the organizational spaces allow to minimize the risks of loss, closure or delegitimationin the market or sector to which they belong. Therefore, it is insisted that it is indispensable for organizations in the deep knowledge of their weaknesses, opportunities, risks and threats, as well as the development of market studies that allow them to also know their direct competence in indirect, the possible allies alliesstrategic that your organization will have.

Finally, it is to keep in mind that in a short term companies also allow to integrate innovative actions to their organizational model that allow greater competitiveness, as well as a contribution to economic, social and scientific development to Colombia.

BIBLIOGRAPHY

• Bermeo, j. R., & Bermeo, and. A. (2005). Cost guidelines as sources of competitive advantages. NO Management Studies. 94, 81-103.
• Campos, m., Ojeda, r., & Suárez, J. (2013). Strategic Management Model for decision making in agricultural entities. Pastures and fodder, 82-88.
• MEETING NETWORK OF CHAMBERS OF COMMERCE. (2017). Determinants of business survival in Colombia.
• Loyal, a. C. (April 18, 2018). Siigo · accounting and administrative software. Obtained from siigo · accounting and administrative software: https: // www.siigo.com/Blog/Entrepreneur/that-as-designer-the-companies-in-colombia/
• Medina, i. R. (2013). Strategic planning. A pillar in business management. El Mobón de Pacioli magazine.
• Nutz, n., & Sievers, M. (2016). General guide for the development of value chains, how to create employment and better working conditions in objective sectors. Geneva: International Labor Organization.
• Quintero, j., & Sánchez, J. (2006). The value chain: a tool of strategic thinking. Telos, vol. 8, no. 3, 377-389.
• Sanabria, m., Saabedra, j. J., & Hernández, to. G. (s.F.). Current challenges of companies in Colombia. University & Company Magazine, 8.