Does implementing VCM mean that cost structure or infrastructure increase?
No, value chain management seeks to improve efficiency and effectiveness and, in the process, attain a higher level of value creation. It does not promote building-on new infrastructure and functionality within the firm, lest it was absent before and it is assessed to be the most viable economic alternative. Cost structures of the firm or the value chain may change however; one area of activities may require additional resources but are then largely offset by productivity or efficiency gains in another or by increases in revenues when customers have acknowledged their willingness to pay for the increase in value they derive from the vendor relationship. The premise of value chain management is to provide firms with a sustainable competitive advantage. This competitive advantage is obtained when customers perceive that the overall effective value of a firms offer exceeds its price. This is entirely independent of the relative price point itself. How a firm chooses to pass on a portion o
