Question

IET 4513 Assignment 2 Questions Explain the porter's value chain model and elucidate the purchasing role. DELL

Answer 1

Businesses seeking competitive advantage frequently turn to value chain models to identify cost-saving opportunities and production cycle differentiations. In an ideal situation, the value chain shows that the cost of building is much lower than the cost that the consumer can absorb, but this becomes more complicated as the complexity of the customer's demands grows and as market competition rises. In addition, technology and methods of communication have changed considerably since the introduction of the value chain model by Michael Porter in 1985. But value chain analysis is still a sound model, even with progress and innovation, to identify market opportunities and achieve competitive differentiation.

Value chains streamline processes from concept to market that take a product. Structure and effective communication between direct, indirect and support components support integral linkages. Direct activities, such as hiring and human capital training, are further supported by appropriate indirect activities, such as record keeping and quality control.

Scale Economies: A true need picture includes cost analysis of demand size, whether local, national or global.
Learning: Activities that change the efficiency or improvement environment, such as scheduling, use of assets, and layout of offices or warehouses.
Capacity Utilization: Procedures that maintain capacity at efficient levels to avoid underspending or adding unnecessary capacity.
Task linkages: Identify cross-functional enhancement areas by collaboration and optimization.
Business unit interrelationships: incentives for exchanging information and resources.

The generic value chain model of Porter is both comprehensive and broad, but it is not absolute. Rather, the model is adaptable to each organization's unique needs. You may think of it as a starting point that as the economy progresses, the competition increases, innovation is implemented, and consumers demand change. A value chain, for instance, may help a company recognize in-house or outsourcing opportunities that benefit from cost savings and expertise.

Inbound logistics Bring the raw material to the company from source. In this stage, the value chain can be improved by improving the raw material performance and reducing the inbound logistics costs. Operations The function of Operations is to transform the raw material to finished products. In this step, the consumer value is increased substantially if the operations are up to the mark and the product is manufactured correctly and meets the quality standards. For understand the importance of operations and production in the value chain, you may take the example of television or air conditioners.

Outbound logistics Sending of finished goods to distributors and retailers from the manufacturing point. The value chain gets a boost if the outbound logistics operations are conducted in time with optimum costs and the service is shipped to end users with minimal impact on product quality. Food products can be an example of how outbound logistics can add value by delivering the best quality product on time.

Marketing and sales In order to increase product sales, marketing and sales apply both push and pull strategy. The company exists to make profits and the company has to use these tools if profits can be increased by marketing and sales. Marketing needs to be done in the right way to build brand equity, however, and sales should be done in the right channel without any false commitments to add value to the end product and brand.

Service Post-sales service is the most important as it directly affects the product's word of mouth advertising. If the service is not up-to-date, no one will buy the product and the company may lose market share and may ultimately be removed from the market. Service is therefore very important in the value chain of Porter. Procurement It is where procurement comes in that vendor management and timely procurement of the raw material. Technology advancement Unless the organization keeps it up-to-date with the latest technology, no product will survive.