Value chain analysis

Topics: Marketing, Supply chain, Strategic management Pages: 4 (568 words) Published: December 10, 2013
Strategic Value Chain Analysis
Wednesday, December 04, 2013
8:48 AM
"Competitive Advantage" 1986
Companies are not groups of people, they are sets of activities.  
There are 2 sets of activities: Cost and willingness to pay (WTP)  
In-bound / raw material ==> Process ==> Marketing ==> Service SECONDARY:
Accounting, Exec Management, CIA
Cost of distribution drivers (for cinnamon buns):
# of stops (greater # raises cost)
# of packages they drop per stop (greater # lowers cost)
Betsy baking used a lot more preservatives in their buns - because they didn't care as much about quality - so longer shelf life means fewer runs, lower distribution costs  
PC Industry (1996)
Buyers - High & Growing
Increasing choice, lowering prices, price sensitive - compatibility (ability to switch); increasing repeat buyers who will be more educated; Resellers had access and knowledge to the customer, which gave them some bargaining power Possibility of vertical integration backward of suppliers (i.e., distributors producing their own computers)  

Suppliers - Mod/High
Processors High, Components Low, Software High (Lots of component manufacturers, but very few processor providers, and pretty much just one operating system company)  
Rivalry - High
Commoditization (price-sensitive buyers)
Frequent upgrades creating excess capacity of older machines There was no true need to upgrade the processors every 18 months - this strategy was intended simply to create excess capacity, forcing manufacturers to discount deeply the older machines, cutting into the profitability of the industry Allocation by loyalty - leveling the playing field

Intel rationed processors to PC manufacturers in proportion to how many chips they bought from Intel in the past; so they rewarded loyalty Whether you were a pipsqueak from NJ or IBM, your loyalty mattered, and you'll get it for the same price from Intel, the only thing that mattered was...
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