PORTER’S MODEL OF GENERIC VALUE CHAIN AND PARADIGM OF VALUE CHAIN

Abstract

Porter’s model, known as “Generic value chain”, is characterized by classification of activities on primary and logistics, which is specific categorization of business functions of an enterprise. Purpose of Porter’s model is creation of stronger cohesion between primary activities and logistics, aiming to reduce costs and to create more valuable output. Through extracting and profiling the basic idea of Porter’s model and its comparing with basic idea of value creation, the conclusion is reached that there is certain inconsistency in generic value chain model. Therefore, Porter’s model is based on the idea of managing efficiency of an enterprise, where value appears as a consequence, not as a main purpose of model construction.

Keywords

• The Porter’s model, concept, value chain, primary activities, logistics.