Figure 5.4: A simplified diagram of a typical value chain In the primary activities of the value chain, there are certain activities that need to be done. These activities are explained in Table 5.4.
TOPIC 5 BUSINESS AND FUNCTIONAL LEVEL STRATEGIES 73 Table 5.4: Value Chain Primary Activities Primary Activity Strateg y Inbound logistics activities Includes material management, warehousing and inventory management, store and distribution inputs of a product. These activities are performed to produce final products. Operations activities Value added activities are performed at this stage as the product moves through the production line. This activity is needed to convert the inputs provided by inbound logistics into the final product. Operations activities include machining, packaging, assembling, machine maintenance and quality control. Outbound logistics activities Involve collecting, storing and distributing the final product along the supply chain to customers. Finished goods, warehousing and order processing are examples of this activity. Marketing and sales activities Focus strongly on marketing communication and the promotion mix. Company creates advertising and promotional campaigns, select distribution channels, and select, develop and support the sales force to meet customers need. Service activities Designed to improve a productÊs value by engaging in a range of service related activities including installation, maintenance and repair, technical support, training, purchaser inquiries and complaints. As for the support activities of the value chain, they consist of the following activities (see to Table 5.5). Table 5.5: Value Chain Support Activities Support Activity Strate gy Firm infrastructure activities Through these activities, the company strives to identify their resources and capabilities, as well as to support their core competencies. Thus, the company needs to ensure that their management, planning, finance and accounting, legal support and government relations work efficiently and effectively. Human resource management activities These activities deal with employees. Therefore, the company must plan for the recruitment, selection, training and development, and compensation and remuneration. This is to make sure the selected employees can perform their job effectively and efficiently.
74 TOPIC 5 BUSINESS AND FUNCTIONAL LEVEL STRATEGIES Technology development/R&D activities The objectives are to reduce cost, to add value and to sustain the company competitive advantage. To achieve these objectives, having the right technology is important because it can help in processing data, product design and service procedures. Procureme nt activities Responsible to purchase and provide the needed raw materials, supplies, services and outsourcing needed to support the company in producing the products. In addition, the company must purchase good quality inputs with low prices.
You've reached the end of your free preview.
Want to read all 192 pages?
- Spring '17