Value Chain (Porter) and Wardley Maps - Similarities and differences

theory

#1

This topic seems to require some clarification, as both frameworks identify components, draw connections between them and then can be used to do some sort of manipulation.

Key difference is in the focus: Porter emphasises efficiency. it’s all about doing exactly the same activities faster and cheaper, Wardley emphasises the purpose, which means understanding the landscape (what is the environment and how it is going to change) and what we are going to do about it. Only then comes the analysis of what is necessary to get things done, and after that, what is needed to get things done effectively and efficiently.

It’s analysis on a completely different levels of abstraction. Thoughts?


#2

Porter’s value chain lacks an anchor (where do we start), relative position (technology is under HR management?) and shows no movement over time. As you said, it’s more about efficiently doing what we’re currently doing rather than why and what we might be doing more effectively tomorrow.

Thanks for bringing this one up Chris. It’s come up a few times in discussions here


#3

A more thorough analysis of Porter Value Chain and Wardley Value Chain (a part of maps before the Evolution dimension is added):

Since all companies build value through some activities, all attempts to analyse those activities should result in similar results. That is probably the reason why Porter’s ‘Value Chains’ and Wardley ‘Value Chains’ look like they were related.

For me, Porter’s approach is focused much more on optimisation and continuous improvement. It takes a company, identifies what is the most important activity, and what can be done to make those more efficient.
Wardley’s approach is more about understanding the relationship between activities and stakeholder needs, and presenting results in a visual manner.

There are also other small nuances:

  • for Porter, value means revenue. For Wardley, it means how much customer values his life improvements, which may have nothing in common with revenues.
  • Porter defines a number of primary activities. For Wardley, f.e. marketing is often not a true activity, as it does not generate value for customers (see previous point).

Wardley Maps were initially called Value Chain Maps, but were renamed exactly because of the confusion with Porter’s work. Activities with dependencies, however, are value chains, and Wardley Maps add ‘Evolution’ on the top of them, which completely what can you do with a framework.


#4

Would you agree Chris that Porter’s Value Chain is not a Map because it lacks:

  1. An anchor (no customer needs)
  2. Position (which is why technology is under HR management)
  3. Movement over time — as it’s focused on efficiently doing activities faster and cheaper, with little exploration as to why we’re doing them (ie no anchor) or how things might look tomorrow.

#5

I’d agree. What I am afraid is that this explanation may not appeal to people who do not know what anchoring is (that is, outside of mapping community).


#6

Good opportunity to bring Maps in though (as a lens to critique current practices)?