a) We have discussed internal value chain activities a firm can perform in its business model....

Question:

a) We have discussed internal value chain activities a firm can perform in its business model. The value chain priorities can be quite different for firms taking different business strategies. Create examples of value chains for three firms: one using cost leadership, another using differentiation, and a third using an integration business-level strategy.

b) A company such as Intel has a complex design and manufacturing process. This should lead Intel management to be concerned with scale of production and learning curves. When do you think managers should be more concerned with large-scale production runs, and when do you think they should be most concerned with practices that would foster or hinder the hiring, training, and retention of key employees?

Management

Key to growth and success of any organization lie in the hands of their management. Management does the crucial task of taking decisions, outlining strategies, redressing grievances and others. Apart from these various functions related to value chain management and staffing are also undertaken by management.

Answer and Explanation:

a) Value chain activities deal with processes an activities that add some value to the product at everystage of production. Various value chains can be used based on following strategies like Differentiation, Cost leadership and integration.

Here, Cost leadership is considered best in general cases which means producing using leadershiptechniques to bring low coat products in the market. Differentiation strategy focuses on lowering coat but adding higher value at each stage. Benefits of both these strategies are combined to form integration strategy.

Examples of each strategy are as follows:

  • Cost leadership: Assume there is a company XY, the company adopts cost leadership strategy. Under this the company studies various departments and activities to know where cost can be cut or reduced.
  • Differentiation: There is a company AB, they launched a new product X which provided the company new value chain technique and company uses innovation and creativity to implement it.
  • Integration: A company ZG focuses more on customer services. They work on primary and support activities to reduce cost and add higher value to their products.

b) Companies like Intel should focus on all the activities irrespective of need. But still there are times when certain activities need to be prioritized in order to meet the need of the moment. Managers should be more concerned with large scale production when demand for products in market is high. This can also be focused when exports are increasing or when there is a product lag. Also in situations when firm can take advantage of economies of scale.

Focus on practices which affect staffing, hiring and other related activities should be laid when there is high employee turnout witnessed. Or when the firm is expanding to new areas or diversifying into new product range. Staffing activities should be focused also when new technology is adopted or economy is in the stage of boom or recession.


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What Is a Value Chain? - Definition, Analysis & Example

from Principles of Marketing: Help and Review

Chapter 2 / Lesson 9
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