Leveraging the Value Chain

A value chain is the chain of activities that a company needs to coordinate in order to execute its product or service. Leveraging the value chain refers to maximizing benefits from the value chain in order to execute its function.

Start-ups can leverage the value chain by:

• Outsourcing in the initials stage, when it lacks the resources and capabilities.
• Design products with as many off-the-shelf parts as possible to minimize design and tooling charges.
• Taking on value chain activities if there are no reliable or ready sources or when those activities provide a competitive advantage.
• Enable lean operations to reduce costs by having suppliers do most of the activities.
• Maintain good relations with value chain partners.
• Balance the activities undertaken in-house and outsourced taking into consideration quality and responsiveness of the value chain partners to market fluctuations.

Peter & Waterman’s 7S framework

The 7s framework identifies seven factors of an organization that need to be aligned in order for an organization to perform well. The model groups the factors into hard and soft ‘S’s. The hard ‘S’ are more tangible, easily to define and easy to influence than the soft ‘S’.

Hard “S”:

Strategy: the plan devised to maintain and build competitive advantage over the competition.

Structure: the way the organization is structured and who reports to whom.

Systems: the daily activities and procedures that staff members engage in to get the job done.

Soft “S”:

Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.

Style: the style of leadership adopted.

Staff: the employees and their general capabilities.

Skills: the actual skills and competencies of the employees working for the company.  

Porter’s 5 forces

Porter's 5 Forces model analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths.

1. Industry competitors: This describes the intensity of competition between existing firms in an industry. Highly competitive industries generally earn low returns because of the high cost of competition.
2. Potential entrants: Ease of new entrants entering the market and competing with your business
3. Suppliers bargaining power: How much pressure suppliers can place on a business. If one supplier has a large enough impact to affect a company's margins and volumes, then it holds substantial power.
4. Buyers bargaining power: This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company's margins and volumes, then the customer holds substantial power.
5. Threat of substitute products: Businesses that offer alternative products/solutions.

Government legislation can act as the sixth force as it can influence all the other forces.

Entrepreneur vs. Manager vs. Leader

Entrepreneur	Manager	Entrepreneurial Leader
Locates new ideas	Maintains current operations	Leverages core business; explores new opportunities
Starts a business	Implements business	Starts businesses within an ongoing organization
Opportunity driven	Resource driven	Capability and opportunity driven
Creates / implements vision	Plans, organizes, staffs, controls	Creates vision, empowers others to carry it out
Builds organization around opportunity	Enhances efficiency of organization	Maintains entrepreneurial ability as company grows
Leads and inspires others	Supervises and monitors others	Develops/guides entrepreneurial individuals
Orchestrates change in the competitive environment	Maintains consistency	Orchestrates change in organizational and competitive environments

Delegation vs. Decentralisation

Basis	Delegation	Decentralization
Meaning	Manager delegate some of their functions and authority to their subordinates	Right to take decisions is shared by top management and other levels of management
Scope	Limited scope as superior delegate on an individual basis	Wide scope as the decision making is shared by subordinates
Responsibility	Responsibility cannot be delegated and remains with the manager.	Responsibility is also delegated to subordinates
Freedom of work	Freedom is not given to subordinates as they have to work as per instructions of their superiors	Freedom to work can be maintained by subordinates as they are free to take decisions and implement them
Nature	It is a routine function	It is an important decision of an enterprise

Task Force vs. Team

Task forces are work groups typically comprising experts in specified areas of knowledge or practice. Task forces are small groups of people and resources brought together to accomplish a specific objective, with the expectation that the group will disband when the objective has been completed.

A team is a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they are mutually accountable.

Skunkworks vs Cross-functional teams

Skunkworks is a group of people who, in order to achieve unusual results; work on a project in a way that is outside the usual rules.

Cross-functional teams are group of people of various backgrounds and expertise who work together in order to achieve a common goal.