Gathering Information For Value Chain Analysis: Secondary Activities

Gathering Information For Value Chain Analysis: Secondary Activities

October 16th, 2019

By Ian Smith

In my prior article, “Gathering Information For Value Chain Analysis: Primary Activities”,  I discussed some of the methodologies and sources needed to gather relevant and current  information that is needed to perform value chain analysis.  In order to complete the exercise, collecting information on a firm’s secondary activities is required.
Secondary activities are functions that are necessary for primary activities to proceed without any issues and to reach established objectives.  As seen in Figure 1, there are four activities to consider during the information gathering and analysis steps.

Figure 1: Value Chain Analysis — Primary and Secondary Activities

1. Firm Infrastructure

As the label suggests, “firm infrastructure” describes all activities pertaining to administration of the company.  From finance to general management, researchers should attempt to cull all available data that is online and when needed, via interviews.  (Note that the Human Resources function is not included when assessing the firm’s infrastructure).  In addition, time must be allocated to delve into annual reports to learn more about current and past personnel of the company.    For individuals that are very familiar with the social business network, LinkedIn, intelligence can be culled by visiting the company’s profile page when the details on personnel are available.

2. Human Resource Management

This component comprises of all the activities related to obtaining sufficient amount of skilled labour to meet the company’s needs. This entails examining:
  • How and where the company recruits its personnel
  • Hiring practices
  • Training and developing initiatives
  • Compensating packages
  • Dismissing or laying off personnel policies
Collecting information on human resources management issues listed is a challenging task.  While some information can be pulled together from the web, some details can only be obtained via interviews with human resources managers.  Some of the information maybe confidential and not be available for the purposes of the value chain analysis exercise.

3. Technology Development

Depending on the sector in question, technology development maybe the most important element to analyse.  It takes into account the equipment, hardware, software and all other technological resources needed by the company to provide its goods and or services.  Researchers can easily discover some of the common technological resources used by key industry players, however; there might be differences how the resources are managed.  To obtain such details, analysts may ask to interview the personnel in the IT department in the company. 

4. Procurement

Procurement for a company encompasses everything under the umbrella acquisition of goods, services or works from an outside external source.  As a result, any information that would be available will remain in the company that is being examined.   Requests can be made to obtain the information, however; details regarding prices will not be discussed by personnel of the company.

Obtaining information for an assessment of secondary activities in a value chain may prove to be daunting and time-consuming task.   The majority of the information lies within the four walls of the company where managers may not be too forthcoming with answers to important questions.  Faced with this reality, it is crucial for analysts and researchers to talk managers and senior executives about the importance of making information readily available to reach their strategic objectives.

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