Porter developed the value chain analysis to realize operational activities which is closely connected with the activities of cost behaviour. Value chain defined as integrated series of organisation, resources, and information involved in production to deliver a value to customers at end . Generally it explain the whole process of a product or service from being conceptualization, supply it to consumers and disposal after final use .A firm or an organization who operates value chain efficiently also cost effectively than it rivals gain competitive advantage.
Primary and secondary stages are involved in value chain analysis.
In this activities relationship are created with supplier by receiving goods, storing them till they are required for production or supply, and performing inventory in due time.. Transportation of goods is performed under this activities. For example product are stored in warehouse and often transported to retailer by manufacturer.
Operation activities comes in function after Inbound logistic. which mostly does machining work, product packaging etc.
For example operation activities could include room service or packing item for online shoppers.
Here in this process products are now ready for distribution to its customers. Generally they are sent along through wholesalers or retailers to customers. To be more precise all curriculum associated here are to deliver products to consumers. As an example, retailers now send shopping to customer home.
This section provide customers information about product and services and influence customers to buy products. As a result this activities are associated with advertising, promotion, .
Supermarket promotes their offer by giving customers ”Buy One Get One Free” or ”Half price” shopping facility.
Sale and services
Any business organisation can retain their customers by offering this service efficiently.
This service include services after any product or services are sold to customers. Installation of product ,customer and repair service, upgrading are main example of this Sales and Service activities. For instance Carphonewarehouse offer customers to upgrade their phone contract with a free mobile phone and other promotional offers. This service soar up the value of a product.
Secondary activities exist to support these primary activities and would include thing like infrastructure, human resource, technology and procurement.
Procurement basically hold the duty for every type of purchasing such as goods service and material. Thus a business or company gain resources. The intention of procurement is not to allow the price go higher but to ensure the best possible quality.
Technology is necessary activities for so called Value chain analysis which performs detailed study to obtain results on certain subject. This discover how to cut down cost and find the way to stay more successful than anyone else. It requires to use of hardware, software, expert knowledge to bring in business changes of input to output
To bring the right staff doing the right thing at the right time is an obligation for this activities. This process starts from recruiting or hiring staff, training and developing. Human resource department also follow dismissal procedure when required.
Answer to E
Dell Computers can be illustrated as an example of Value Chain analysis. It manufactures computers in several region such as Europe, America, Taiwan, Malaysia and China. This company has brought a significant change in computer production. By this strategy Dell has been able to sell computer directly to the customers. This system is known as Electronic Data Interchange and Just In Time (JIT) inventories are mostly depend on website technology. This process can supply the computer to a customer within a week as soon as an order is placed. Altogether assembling a computer take less than seven hours including software installation and system check. It is necessary for suppliers to hold the inventory as to get the parts when needed, as a result they know when replenishment is required.
Dell became no 1 computer seller by maintaining efficient operation strategy. the server, storage system, mobile and desktop computers are built-to-order in six manufacturing facilities around the world The web based system instruct and maintain the order and inventory level. Dell can take its inventory only in four days regardless of how many customers they are serving with how many products. ( Fiscal 2005,in review 2005).
Dell enables its customer to buy products through internet or over the telephone or fax and named this process direct to consumers business model. It is claimed that dell made it easy for customers to order product online than order over phone or fax. After order the computer is assembled than supplied to customers within 7 working days.
Dell also has achieved significant success in its sales and marketing. Now a days advertisement of dell product can be seen across TV, newspaper etc. due to this type of advertisement and promotion currently Dell now sell over 50% of its total sale by internet. Moreover one third of Dell employees are working in sales and marketing. Also to remove possible internal conflict dell introduced credit for sale to country manager and sale reps whether the order is taken by phone or internet.
In order to reduce cost dell minimised the level of interaction between consumers and employees by introducing direct sale. Customers often contacts service centre if they experience a system problem. An example for this would be , if a customer’s hard disc fails to work, then the information pass through the technical support and then into Dell’s service and support systems. After that a piece of new equipment shipped to customer. In this stage dell ranked a position behind Apple, IBM and Toshiba regarding customers service. (Computers, Desktops, & Laptops, 2006, p. 232). But Dell has managed to remain in a higher position than its rival HP and Compaq . Senior executives became aware of this situation and now working ahead for improvements.