The Business Model and Value Chain of Cultural and Creative Industry

Abstract

The framework of Porter’s value chain(1985) is extremely useful for manufacturing firms to conduct competitive analysis and formulate strategy. However, Cultural products carry a strong symbolic value which is determined by the social and cultural meanings associated with it that allow consumers to express individual and social identity via the purchase and use of the product. We believe the original value chain is not applicable to firms marketing cultural and creative products. Based upon case study from the experiences in Taiwan, we propose a Culture Creative-Based Value Chain (CCVC). Drawn from CCVC, we find there are three different business models utilized by firms, namely, company with marketing competence, craftsman/designer brand, and vertically integrated company. We also compare the various value activities of CCVC for the three business models.