Understanding the Dynamics of the Value Chain

Contributions and Significance of the ­Contemporary Model

We acknowledge Michael Porter’s important and groundbreaking work on the concept of the value chain. Our effort here is to build on it and create a model more attuned to the 21st-century business environment.

First, including leadership as an explicit component of the Contemporary model reflects the fact that leadership matters as Jim Collins established in his book Good to Great.27 Great leaders set the tone and are the foundation of a great value chain. Leadership is not an embedded feature of the Porter model. It needs to be made explicit that effective value chains just don’t happen. They are effectively led and the tone of that leadership must permeate the organization.

Second, great ...