Value Chain Management: Functional Strategies for Competitive Advantage

These flashcards cover key terms and definitions related to value chain management and functional strategies necessary for achieving competitive advantage.

Functional-level strategy

A plan of action to improve the ability of each department in an organization to perform its tasks in ways that add value to goods and services.

Value chain

The coordinated series of functional activities necessary to transform inputs into the finished goods or services that customers value.

Value chain management

Development of functional-level strategies that support a company's business-level strategy and strengthen its competitive advantage.

Product development

Engineering and research activities involved in innovating or improving products to add value.

Marketing function

The task of persuading customers that a product meets their needs and encouraging them to buy.

Materials management function

Controls the movement of physical materials from procurement through production to delivery to the customer.

Production function

Responsible for creating, assembling, or providing goods and services by transforming inputs into outputs.

Sales function

Plays a crucial role in locating customers and persuading them to purchase products.

Customer service function

Provides support after sales to create a perception of superior value by solving customer problems.

Total quality management (TQM)

Focuses on improving the quality of products and aligns all value chain activities toward this goal.

Just-in-time (JIT) inventory system

A system that delivers components to the assembly line precisely when they are needed to reduce costs.

Process reengineering

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in performance.

Quantum product innovation

The development of radically different products resulting from fundamental shifts in technology.

Incremental product innovation

Gradual improvements and refinements of existing products over time.

Stage-gate development funnel

A planning model that forces managers to choose among competing projects to avoid stretching resources too thin.

Cross-functional teams

Teams that bring together members from different departments to work on a project throughout its lifecycle.

Six Sigma

A technique designed to enhance quality by systematically improving the execution of value chain activities and applying statistical methods to measure improvements. Motorola