Strategic Logistics and Supply Chain Management

Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering, and supporting its product. Each of these activities can contribute to a firm's relative cost position and create a base for differentiation... the value chain disaggregates a firm into its strategically relevant activities in order to understand the behavior of costs and the existing and potential sources of differentiation. A firm gains a competitive advantage by performing these strategically important activities more cheaply or better than its competitors. The supply chain is the network of organizations that are involved, through upstream and downstream linkages in the different processes that produce value in the form of products and services in the hands of the ultimate consumer.