4. Content, Context and Infrastructure

Using ‘chain’ as a metaphor for accomplishing a set of inter-linked tasks to achieve a predetermined end result is not new (Van Dalen, 1997). One of the first graphical representations of how interdependent operations can be coordinated to provide a final product or service that has greater value than the sum of the parts was the value chain (Porter, 1980). Since that time much work has been undertaken to build upon Porter’s theories surrounding how organisations can develop a sustainable competitive advantage.

Arguably the most radical redefining of Porter’s original value chain model was by Hines (1994). While reversing the direction of Porter value chain initially appears only cosmetic, the principle it highlights is something Porter’s model missed and which is critical to organisation’s success. Hines hypothesized that unless procedures performed in a chain provided end

When new practices also allow cost reductions, firms have the opportunity to gain competitive advantage by either lowering prices or increasing profits. Which they choose will depend on their business strategy.

However, to achieve sustainable competitive advantage in a rapidly evolving environment, organisations must have access to unique resources (Porter & Millar, 1985). Increasingly, those resources will emanate from organisational skills and knowledge learnt from practices only made possible by information technology.

The information Blackmores receive allows the company to acquire new knowledge and skills, leading to well-planned decisions surrounding product development and manufacturing, while also enhancing its naturopathic services. The entire procedure provides Blackmores with competitive advantage while simultaneously strengthening customer loyalties.

This is especially true where the two value chains can complement each other through related yet distinctly separate activities (Rayport & Sviokla, 1995/96). An example is where operating in the virtual world allows companies to establish closer links to customers, who in turn provide information that can be incorporated into physical products and services. The combined chains offering superior value.

Virtual value chains are non-linear (Rayport & Sviokla, 1995). This means that the Content, Context and Infrastructure elements of a virtual value chain can be separated to create economic value. This is unlike physical value chains, where procedures are carried out in a linear fashion to produce a final product or service that attracts customers through the traditional four to seven ‘P’ based marketing mix that incorporates all three elements.

2. The Value Chain

While there are distinct differences between physical and virtual value chains, the overall philosophy remains the same: to maximise customer recognised values and loyalties by inter-linking multiple procedures in the most effective, efficient, and customer-focused manner possible (Van Dalen, 1997).

Some topics in this essay:
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