Relationship between SWOT analysis and Value Chain management
Use the Bible and other sources to provide biblical application of SWOT Analysis and Value Chain Analysis as it relates to the strategic allocation of financial resources. Use the paper below and include what is requested above. All resources need to be done in this format as an example : Drollinger, T., Comer, L. B., & Warrington, P. T. (2006). Development and validation of the active empathetic listening scale. Psychology & Marketing, 23(2), 161-180. https://doi.org/10.1002/mar.20105
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Relationship between a SWOT analysis and Value Chain management
Both the SWOT analysis and value chain management are crucial to the success of a company. SWOT, an acronym for Strengths, Weaknesses, opportunities and Threats, helps evaluate and elevate the company's performance (Phadermrod et al., 2019). On the other hand, value chain management is the process of monitoring and managing the operations of the company, including manufacturing, procurement, production, quality control and distribution (Zamora, 2016). SWOT analysis provides a framework that analysis the external and internal factors affecting the business operations. The value chain provides 'value' for the product, and the value increases depending on the production chain (from production to distribution).
SWOT analysis has many benefits for the company. For instance, it helps in assessing the company's strategic situation in a detailed yet brief manner. It mainly analyses the internal operations of the company in regards to the external environment. For instance, analyzing how a company can take advantage of its competitors depends on the company’s internal factors (Phadermrod et al., 2019). Hence, SWOT analysis the company’s own Strengths and Weaknesses. Evaluating the weaknesses helps the company make relevant and meaningful changes to help sustain itself regarding competition. It also analysis the Opportunities that the market presents and the Threats posed by the competitors or other factors of production.
On the other hand, the value chain looks at the chain of production and analyses how the input (labour and raw materials) affect the company's output (finished products). Its main aim is to analyze how input can be improved to increase the value of output (Zamora, 2016). For the satisfaction of its target market. It also analyses what customers value the most in terms of the quality and price of the product in regards to other competitors offering similar products.
Typically, there exist several relationships between SWOT and the value chain within a company. First, the internal analysis of SWOT gives little information concerning the internal business environment. It only gives the Strengths and Weaknesses of the company, leaving out a lot of information about the company's operations. Value chain hence provides more information left out by SWOT analysis, thereby creating a complete picture of the financial and operational situations of the company (Irfan et al., 2020). Conversely, value chain analysis the needs and desires of the customers and attempts to create more value for the product. SWOT analysis of both the internal and external business environments, thereby giving a broader picture of the company's operations. Combining the two gives a complete picture of the company and exposes areas that need improvement for better customer experience and the company's success. Thus, the relationship between value chain and SWOT is they offer a combined analysis of the company's operations (Irfan et al., 2020).
The value of a product can also be increased through outsourcing. Outsourcing entails sub contacting some of the company’s operations to other companies, foreging or domestic, that offer a substantially lower price. Outsourcing is an integral part of the value chain, as getting cheaper and specialized labour for the company's operations is helpful in increasing the value of the final product (Globerman & Vining, 2017). SWOT helps in evaluating whether the option of outsourcing is beneficial to the company's operations in terms of the financial implications. For instance, SWOT analyses the Strengths and Weaknesses of using an external company to help in production and its advantage on the company. It also looks at the opportunities it may present in terms of initiating more outsourcing activities for the company. However, if the Threats outweigh the Opportunities and Strengths of outsourcing, then it no longer becomes a viable option. Hence, SWOT helps evaluate some of the elements of the value chain by generating a broader perspective in terms of its pros and cons.