Porter’s value chain divides an organization’s activities into primary activities, which are directly related to the creation of a product or service, and support activities, which enable the primary activities to take place efficiently. For a retailing company such as Bazar, Porter identified five primary value chain activities:

1. Inbound Logistics
   These activities concern receiving and handling purchased materials and components and storing them until needed. In Bazar’s case, this might include receiving products into the central warehouse from manufacturers and groceries’ farm gates. Inbound logistics activities also include transportation from suppliers, inventory management, and inventory control.
2. Operations
   Operations refer to the activities that convert the purchased materials into items that customers can buy. For Bazar, operations could include breaking bulk, ensuring items are refrigerated, and designing the store layout to ensure customers can easily access products on shelves at the correct price and location.
3. Outbound Logistics
   Outbound logistics activities involve the storage of finished goods before sales and the distribution of goods to the final customers. For Bazar, this might include distributing goods from the central warehouse to regional and district stores.
4. Marketing and Sales
   These activities inform customers about the products or services and persuade them to make purchases. In Bazar’s case, marketing and sales would include activities such as printing advertising materials, using video projections at stores, and organizing publicity events to inform customers about new store openings while highlighting convenience and security features.
5. Services
   Service activities occur after the point of sale and include after-sales services such as installation, warranties, customer loyalty management, repairs, and maintenance. For Bazar, these services may also include training employees or customer representatives and managing after-sales care.

Diagram:

Relevance:
The value chain is crucial for improving the quality of customer service and operational efficiency at Bazar. Each activity contributes to reducing costs and enhancing customer satisfaction, which in turn helps Bazar maintain its competitive advantage.