Support activities

Definition

Support activities are the functions within an organization that help enhance the effectiveness and efficiency of primary activities in the value chain. They include processes like procurement, technology development, human resource management, and firm infrastructure, all of which play a crucial role in supporting the core operations that deliver value to customers.

5 Must Know Facts For Your Next Test

1. Support activities do not directly create value but are essential for enhancing the efficiency and effectiveness of primary activities.
2. Human resource management ensures that the organization has skilled employees who can perform tasks effectively and adapt to changing needs.
3. Procurement focuses on acquiring the necessary resources and materials at the best possible cost and quality to support primary activities.
4. Technology development involves improving processes and products through innovation, which can lead to significant competitive advantages.
5. Firm infrastructure encompasses the systems and structures that enable an organization to function smoothly, including planning, finance, and quality management.

Review Questions

• How do support activities influence the effectiveness of primary activities in the value chain?
  • Support activities significantly influence the effectiveness of primary activities by providing essential resources and systems that enhance overall performance. For example, effective human resource management ensures that skilled personnel are available to carry out operations efficiently. Similarly, strong procurement processes ensure that high-quality materials are obtained at competitive prices, which directly impacts the cost structure and quality of the final product. Together, these support functions ensure that primary activities can operate smoothly and effectively.
• Discuss the relationship between support activities and competitive advantage in an organization.
  • Support activities are integral to building a competitive advantage because they enhance the effectiveness of primary activities while also contributing uniquely to an organization's offerings. For instance, firms that invest in technology development can create innovative products or streamline processes that differentiate them from competitors. Moreover, effective human resource management helps attract and retain top talent, which can lead to superior performance. By optimizing these support functions, organizations can achieve efficiencies and capabilities that competitors may not be able to match.
• Evaluate how changes in support activities might impact an organization's overall strategy and market position.
  • Changes in support activities can have profound effects on an organization's overall strategy and market position. For example, if a company improves its technology development capabilities, it could lead to faster innovation cycles and improved product offerings. This could necessitate shifts in marketing strategies to highlight these innovations, ultimately impacting market positioning. Furthermore, enhancing human resource management practices might lead to a more engaged workforce, resulting in better service delivery and customer satisfaction. Such changes require organizations to reassess their strategic goals to align with new capabilities created by improved support activities.

Related terms

primary activities: The core functions in a value chain that directly create value for the customer, including inbound logistics, operations, outbound logistics, marketing and sales, and service.

value chain: A model that describes the full range of activities needed to create a product or service, from conception to delivery and beyond, highlighting how these activities can create competitive advantage.

competitive advantage: A condition or circumstance that puts a company in a favorable or superior business position, often achieved through effective management of both primary and support activities.