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Topic: Student Questions

Value Chain For Software Development

Posted by granberg.bjorn on 12/14/2012 at 7:33 AM ET 125 Points
Hello,

I am currently writing a business plan for a software company and have got stuck at the value chain analysis. It would be very helpful with some help how to apply the value chain to a Software company. What could be primary activities and support activities? Thank you!

/Bjorn
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  • Posted on 12/14/2012 at 9:28 AM Accepted
    That would depend on the target audience and distribution strategy, wouldn't it? If you're selling games direct to consumers the value chain would be different than if you were selling highly specialized software to the aerospace industry or to accountants, etc.
  • Posted by granberg.bjorn on 12/14/2012 at 9:51 AM Author
    Yes, of course. It is a quotation software sold directly to the consumer (businesses) through recommendations and advertising. All activities will be done in-house (development, sales etc.). What I am looking for is a general value chain for the software business to get inspiration, (what activities would be relevant and why). Thank you
  • Posted by Gary Bloomer on 12/14/2012 at 10:03 AM Accepted
    What kind of quotations? What does the user's use of the software enable them to do, across what niches, compared to what competition, in what kind of time frame, with what kind of ease?

    Value is created when the solution (through the use of the product) is of greater benefit to the user
    than the price, ease of use, time, and investment of mental energy required to do without the solution.
  • Posted by Moriarty on 12/14/2012 at 1:29 PM Accepted
    I think we need to start with the people who are going to buy and use this software. Serving their needs is going to answer many of these questions for you.

    Taking a careful look at your software will allow you to offer three levels of functionality - and depending on your sales structure you will be able to offer a basic, average and super functionality all of which upgrade (or downgrade) as needed by your clients. It would also allow you to offer a version with a free trial of the next upgrade for a month.

    Moriarty

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