An provocative piece in the HBR blogs today in which the author contends that Porter’s value chain no longer works because of the impact of social media.
Whilst it is an interesting piece, I can’t agree with it’s central hypothesis. The value chain is descriptive of an industry/company, and can be used to analyse where you are spending your money (and where you should be spending your money), and where you could bend or concentrate your capabilities in order to deliver the product you intend.
In the past, this did tend towards providing economies of scale and cost efficiency, but only because firms that did this type of analysis operated in those types of markets. If your business was in creating bespoke items, then your value chain is always likely to be different to a mass-market producer.
Social media and technology advances will undoubtadly cause a change in the value chain of these mass-market producers, but this does not negate the value of the model as an analytical tool.
Have a read of the orginal article, and let me know your views.