Analysis of global value chain and global supply chain

Analysis of global value chain and global supply chain

Introduction

In modern business era the concept of global value chain has gained gigantic recognition mainly because organization implementing this concept focus to create, and capture value across all business function, and further this concept also emphasis on the limitation of the word “Commodity” because it was discouraging differentiable products from entering into the market (Costinot & Vogel, 2013). Business operating through global value chain emphasize on the expansion of the economic market, enhancing the coordination and support of the business partners, and others.

Global value chain approach explores the global economy using two innovative tools that are top down approach, and bottom up approach. Top down approach of the global value chain primarily focus on the issues of organizational “governance” in the global environment. On the other hand, the bottom up approach focuses on the policies, strategies, tools, adopted by all international business players to sustain, and enhance their position in the global economy.

Implementation of global value chain approach has provided enormous advantages to the business world, and among those, the most important advantage is that companies can easily access the market of developed countries by participating in the network of global production network of firms that are operating in the global countries. The concept of global value chain could be understood from this example. “Gillette Company is well known for its quality production and strong supply chain network however, now the company is aiming to implement the global value chain approach, in their business operations in order to ensure quality value of its product, with respect to quality supply (Costinot & Vogel, 2013; Gereffi, 2011).

On the other hand, global supply chain is another approach that has emerged in the global business environment. in global ...