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A company is in essence a collection of activities that are performed to design, produce, market, deliver and support its product (or service). It’s goal is to produce the products in such a way that they have a greater value (to customers) than the orginal cost of creating these products. The added value can be considered the profits and is often indicated as ‘margin’. A systematic way of examining all of these internal activities and how they interact is necessary when analyzing the sources of competitive advantage. A company gains competitive advantage by performing strategically important activities more cheaply or better than its competitors. Michael Porter’s value chain helps disaggregating a company into its strategically relevant activities, thereby creating a clear overview of the internal organization. Based on this overview managers are better able to assess where true value is created and where improvements can be made.

Porter’s Value chain Model

One company’s value chain is embedded in a larger stream of activities that can be considered the supply chain or as Porter mentions it: the Value System. Suppliers have a value chain (upstream value) that create and deliver the purchased inputs. In addition, many products pass through the value chain of channels (channel value) on their way to the buyer. A company’s product eventually becomes part of its buyer’s value chain. This article will not go into the entire supply chain (from suppliers all the way to the end-consumer), but rather focuses on one organization’s value chain. The value chain activities can be divided into two broader types: primary activities and support activities.

Primary Activities

The first are primary activities which include the five main activities. All five activities are directly involved in the production and selling of the actual product. They cover the physical creation of the product, its sales, transfer to the buyer as well as after sale assistance. The five primary activities are inbound logistics, operations, outbound logistics, marketing & sales and service. Even though the importance of each category may vary from industry to industry, all of these activities will be present to some degree in each organization and play at least some role in competitive advantage.

1. Inbound Logistics

Inbound logistics is where purchased inputs such as raw materials are often taken care of. Because of this function, it is also in contact with external companies such as suppliers. The activities associated with inbound logistics are receiving, storing and disseminating inputs to the product. Examples: material handling, warehousing, inventory control, vehicle scheduling and returns to suppliers.

2. Operations

Once the required materials have been collected internally, operations can convert the inputs in the desired product. This phase is typically where the factory conveyor belts are being used. The activities associated with operations are therefore transforming inputs into the final product form. Examples: machining, packaging, assembly, equipment maintenance, testing, printing and facility operations.

3. Outbound Logistics

After the final product is finished it still needs to finds it way to the customer. Depending on how lean the company is, the product can be shipped right away or has to be stored for a while. The activities associated with outbound logistics are collecting, storing and physically distributing the product to buyers. Examples: finished goods warehousing, material handling, delivery vehicle operations, order processing and scheduling.

4. Marketing & Sales

The fact that products are produced doesn’t automatically mean that there are people willing to purchase them. This is where marketing and sales come into place. It is the job of marketers and sales agents to make sure that potential customers are aware of the product and are seriously considering to purchase them. Activities associated with marketing and sales are therefore to provide a means by which buyers can purchase the product and induce them to do so. Examples: advertising, promotion, sales force, quoting, channel selection, channel relations and pricing. A good tool to structure the entire marketing process is the Marketing Funnel.

5. Service

In today’s economy, after-sales service is just as important as promotional activities. Complaints from unsatisfied customers are easily spread and shared due to the internet and the consequences on your company’s reputation might be vast. It is therefore important to have the right customer service practices in place. The activities associated with this part of the value chain are providing service to enhance or maintain the value of the product after it has been sold and delivered. Examples: installation, repair, training, parts supply and product adjustment.

Support Activities

The second category is support activities. They go across the primary activities and aim to coordinate and support their functions as best as possible with eachother by providing purchased inputs, technology, human resources and various firm wide managing functions. The support activities can therefore be divided into procurement, technology development (R&D), human resource management and firm infrastructure. The dotted lines reflect the fact that procurement, technology development and human resource management can be associated with specific primary activities as well as support the entire value chain.

1. Procurement

Procurement refers to the function of purchasing inputs used in the firm’s value chain, not the purchased inputs themselves. Purchased inputs are needed for every value activity, including support activities. Purchased inputs include raw materials, supplies and other consumable items as well as assets such as machinery, laboratory equipment, office equipment and buildings. Procurement is therefore needed to assist multiple value chain activities, not just inbound logistics.

2. Technology Development (R&D)

Every value activity embodies technology, be it know how, procedures or technology embodied in process equipment. The array of technology used in most companies is very broad. Technology development activities can be grouped into efforts to improve the product and the process. Examples are telecommunication technology, accounting automation software, product design research and customer servicing procedures. Typically, Research & Development departments can also be classified here.

3. Human Resource Management

HRM consists of activities involved in the recruiting, hiring (and firing), training, development and compensation of all types of personnel. HRM affects the competitive advantage in any firm through its role in determining the skills and motivation of employees and the cost of hiring and training them. Some companies (especially in the technological and advisory service industry) rely so much on talented employees, that they have devoted an entire Talent Management department within HRM to recruit and train the best of the best university graduates.

4. Firm Infrastructure

Firm infrastructure consists of a number of activities including general (strategic) management, planning, finance, accounting, legal, government affairs and quality management. Infrastructure usually supports the entire value chain, and not individual activities. In accounting, many firm infrastructure activities are often collectively indicated as ‘overhead’ costs. However, these activities shouldn’t be underestimated since they could be one of the most powerful sources of competitive advantage. After all, strategic management is often the starting point from which all smaller decisions in the firm are being based on. The wrong strategy will make it extra hard for people on the workfloor to perform well.

Linkages within the Value Chain

Although value activities are the building blocks of competitive advantage, the value chain is not a collection of independent activities. Rather, it is a system of interdependent activities that are related by linkages within the value chain. Decisions made in one value activity (e.g. procurement) may affect another value activity (e.g. operations). Since procurement has the responsibility over the quality of the purchased inputs, it will probably affect the production costs (operations), inspections costs (operations) and eventually even the product quality. In addition, a good working automated phone menu for customers (technology development) will allow customers to reach the right support assistant faster (service). Clear communication between and coordination across value chain activities are therefore just as important as the activities itself. Consequently, a company also needs to optimize these linkages in order to achieve competitive advantage. Unfortunately these linkages are often very subtle and go unrecognized by the management thereby missing out on great improvement opportunities.

In the end, Porter’s Value Chain is a great framework to examine the internal organization. It allows a more structured approach of assessing where in the organization true value is created and where costs can be reduced in order to boost the margins. It also allows to improve communication between departments. Combining the Value Chain with the VRIO Framework is a good starting point for an internal analysis. In case you are interested in the entire supply chain, you could repeat the process by adding the value chains of your company’s suppliers and buyers and place them in front and behind your own company’s value chain.

Intranet is defined as private network of computers within an organization with its own server and firewall. Moreover we can define Intranet as:

Intranet is system in which multiple PCs are networked to be connected to each other. PCs in intranet are not available to the world outside of the intranet.

Usually each company or organization has their own Intranet network and members/employees of that company can access the computers in their intranet.

Every computer in internet is identified by a unique IP address.

Each computer in Intranet is also identified by a IP Address, which is unique among the computers in that Intranet.

Advantage of Intranet

Intranet is very efficient and reliable network system for any organization. It is beneficial in every aspect such as collaboration, cost-effectiveness, security, productivity and much more.

(i) Communication

Intranet offers easy and cheap communication within an organization. Employees can communicate using chat, e-mail or blogs.

(ii) Time Saving

Information on Intranet is shared in real time.

(iii) Collaboration

Information is distributed among the employees as according to requirement and it can be accessed by the authorized users, resulting in enhanced teamwork.

(iv) Platform Independency

Intranet can connect computers and other devices with different architecture.

(v) Cost Effective

Employees can see the data and other documents using browser rather than printing them and distributing duplicate copies among the employees, which certainly decreases the cost.

(vi) Workforce Productivity

Data is available at every time and can be accessed using company workstation. This helps the employees work faster.

(vii) Business Management

It is also possible to deploy applications that support business operations.

(viii) Security

Since information shared on intranet can only be accessed within an organization, therefore there is almost no chance of being theft.

(ix) Specific Users

Intranet targets only specific users within an organization therefore, once can exactly know whom he is interacting.

(x) Immediate Updates

Any changes made to information are reflected immediately to all the users.

Issues in Intranet

Apart from several benefits of Intranet, there also exist some issues.. These issues are shown in the following diagram:

Applications

Intranet applications are same as that of Internet applications. Intranet applications are also accessed through a web browser. The only difference is that, Intranet applications reside on local server while Internet applications reside on remote server. Here, we’ve discussed some of these applications:

(i) Document publication applications

Document publication applications allow publishing documents such as manuals, software guide, employee profits etc without use of paper.

(ii) Electronic resources applications

It offers electronic resources such as software applications, templates and tools, to be shared across the network.

(iii) Interactive Communication applications

Like on internet, we have e-mail and chat like applications for Intranet, hence offering an interactive communication among employees.

(iv) Support for Internet Applications

Intranet offers an environment to deploy and test applications before placing them on Internet.

The Internet is a vast network of interconnected computers and other devices spanning the globe. It facilitates the exchange of data and information through a system of interconnected networks using standardized communication protocols. This network infrastructure enables a myriad of services, including email, instant messaging, file sharing, and access to the World Wide Web.

The Internet’s origins can be traced back to the late 1960s with the development of ARPANET, a project funded by the U.S. Department of Defense’s Advanced Research Projects Agency (ARPA). ARPANET was designed to create a decentralized communication network capable of withstanding partial outages, making it more resilient in the event of a nuclear attack.

As ARPANET expanded, other networks emerged, eventually forming the foundation of the modern Internet. In the 1980s, the development of the TCP/IP protocol suite standardized communication protocols, allowing diverse computer networks to interconnect seamlessly. This laid the groundwork for the global network we know today.

The Internet operates on a decentralized architecture, with no single point of control. Instead, it relies on a distributed system of interconnected routers, servers, and other networking devices to transmit data packets across vast distances. This decentralized nature contributes to the Internet’s robustness and resilience, as there is no single point of failure that could bring down the entire network.

The World Wide Web: A Network of Information

The World Wide Web, often referred to as the Web, is a subset of the Internet that consists of interconnected web pages and resources accessible via the Internet. It was invented by Sir Tim Berners-Lee, a British computer scientist, in the late 1980s while working at CERN, the European Organization for Nuclear Research.

Berners-Lee’s vision was to create a system for sharing and accessing information across different computer systems. He developed the foundational technologies that power the Web, including the Hypertext Transfer Protocol (HTTP) for transferring web resources, Uniform Resource Locators (URLs) for identifying web resources, and Hypertext Markup Language (HTML) for structuring web documents.

The Web revolutionized the way information is organized and accessed, providing a user-friendly interface for navigating a vast repository of digital content. Web pages are interconnected through hyperlinks, allowing users to navigate between different resources with ease. This interconnectedness forms the basis of the Web’s “hypertext” structure, where text, images, and other media are linked together in a non-linear fashion.

Key Components of the World Wide Web

• Web Browsers:

Web browsers are software applications that allow users to access and navigate the World Wide Web. Popular web browsers include Google Chrome, Mozilla Firefox, Apple Safari, and Microsoft Edge. Browsers interpret HTML documents and render them as visually appealing web pages for users to interact with.

• Web Servers:

Web servers are computer systems that store and serve web content to clients upon request. When a user requests a web page, their browser sends a request to the appropriate web server, which then retrieves the requested content and sends it back to the client for display. Common web server software includes Apache HTTP Server, Nginx, and Microsoft Internet Information Services (IIS).

• HyperText Markup Language (HTML):

HTML is the standard markup language used to create web pages. It provides a set of tags that define the structure and content of a web document, including headings, paragraphs, images, links, and multimedia elements. Web browsers interpret HTML documents and render them as visually appealing web pages for users to interact with.

• Uniform Resource Locators (URLs):

URLs are web addresses that identify the location of web resources on the Internet. They consist of several components, including the protocol (e.g., http:// or https://), the domain name (e.g., example.com), and the path to the specific resource (e.g., /page1.html). URLs enable users to access web pages and other resources using a standardized addressing scheme.

• Hypertext Transfer Protocol (HTTP):

HTTP is the protocol used for transferring hypertext documents on the World Wide Web. It defines how web browsers and servers communicate with each other to request and transmit web resources. HTTP operates as a stateless protocol, meaning that each request from the client is processed independently, without any knowledge of previous interactions.

• Hyperlinks:

Hyperlinks are clickable elements embedded in web pages that allow users to navigate between different resources on the Web. They are typically displayed as text or images with an underlying URL. Clicking on a hyperlink redirects the user to the linked resource, whether it’s another web page, a multimedia file, or a downloadable document.

Evolution of the World Wide Web

Since its inception, the World Wide Web has undergone significant evolution, driven by technological advancements and changing user needs.

1. Web 1.0 (The Static Web):

The early days of the Web were characterized by static web pages containing primarily text and images. Content was created and published by a relatively small number of individuals and organizations, and user interaction was limited to browsing and consuming information.

2. Web 2.0 (The Social Web):

The emergence of Web 2.0 in the early 2000s marked a shift towards dynamic, interactive web experiences. This era saw the rise of social media platforms, user-generated content, and collaborative online communities. Web 2.0 technologies empowered users to create, share, and interact with content in new ways, blurring the lines between consumers and producers of information.

3. Web 3.0 (The Semantic Web):

Web 3.0, also known as the Semantic Web, is an ongoing evolution of the Web towards a more intelligent, interconnected network of data. It aims to make web content more machine-readable and interpretable by creating standardized formats for representing and linking data. Semantic technologies such as RDF (Resource Description Framework) and SPARQL (SPARQL Protocol and RDF Query Language) enable machines to understand the meaning and context of web content, paving the way for more sophisticated applications such as natural language processing, knowledge graphs, and personalized recommendations.

Challenges and Opportunities

While the Internet and the World Wide Web have revolutionized the way we communicate, collaborate, and access information, they also present various challenges and opportunities:

1. Privacy and Security:

The pervasive nature of the Internet raises concerns about privacy and security, as sensitive information can be intercepted, accessed, or exploited by malicious actors. Ensuring the confidentiality, integrity, and availability of data is paramount to maintaining trust and confidence in online interactions.

2. Digital Divide:

The digital divide refers to the gap between those who have access to digital technologies and those who do not. Disparities in access to the Internet and digital literacy skills can exacerbate existing inequalities, limiting opportunities for socio-economic advancement and participation in the digital economy.

3. Information Overload:

The abundance of information available on the Web can lead to information overload, making it challenging for users to find relevant and reliable content amidst the noise. Tools and techniques for information retrieval, filtering, and curation are essential for managing information overload and extracting value from vast amounts of data.

4. Cybersecurity Threats:

The interconnected nature of the Internet exposes individuals, organizations, and critical infrastructure to various cybersecurity threats, including malware, phishing, ransomware, and distributed denial-of-service (DDoS) attacks. Implementing robust cybersecurity measures, such as encryption, authentication, and intrusion detection, is essential for mitigating these threats and safeguarding digital assets.

5. Ethical and Legal Implications:

The proliferation of digital technologies raises complex ethical and legal questions related to intellectual property rights, online privacy, freedom of expression, and algorithmic bias. Balancing innovation and regulation is crucial for ensuring that the Internet and the World Wide Web remain open, inclusive, and beneficial for society as a whole.