DISCUSS FULLY THE CONCEPT OF VALUE CHAIN ANALYSIS, SHOW HOW AN ORGANISATION OF YOUR CHOICE CAN UTILISE THE CONCEPT OF VALUE CHAIN ANALYSIS TO BETTER SERVE THEIR CHOSEN MARKETS.
This essay will explain the value chain analysis as a tool that is used by management to establish what they can do and how they can do it to add more value to the customer experience. Our case study is going to be Bakers Inn a subsidiary of Innscor Africa Limited.
Bakers Inn opened its first retail outlet in Harare, Zimbabwe, and later expanded a highly successful footprint across Africa, more specifically in Zimbabwe, Kenya and Zambia. The brand has consistently updated its offering to suit the changing needs of its customers, and now offers a selection of bread including white, brown, whole-wheat, seed, and low GI. Irresistible treats on offer include chocolate and cream doughnuts, cakes, muffins, as well as various meat pies, buns and rolls.
The idea of value chain analysis was first suggested by Michael Porter (1985) when he was illustrating how the activities within an organisation add value to the products and services that are produced by the organisation. Porter was of the opinion that if an organisation wants to gain any substantial competitive advantage all the activities that the organisation perform that leads up to the delivery of its product or service must be run at an optimal level.
Kaplinksy and Morris (2000) describes the value chain as an analytical tool that helps understand the way in which firms (large or small) are integrated and linked in the value chain. The value chain describes a full range of activities which are required to bring a product or service from the time the product is only an idea to the time when it is produced, processed, delivered to final consumers and disposed of after use.
John Shank and V Govindarajan (1993) state that “the value chain for any firm is the valu-creating activities all the way from basic raw material sources from component suppliers through to the ultimate end-use product delivered into the final consumers’ hands” This description views the firm as a part of an overall chain of value-creating processes. According to Shank and Govindarajan (1993), the industry value chain starts with the value creating processes of the suppliers, who provide the basic raw materials and components. It continues with the value creating processed of the different classes of buyers or end use consumers and then culminates in the disposal and recycling of materials.
The value chain analysis is a three step process, which begins with Activity Analysis. This is the first process in the value chain analysis; you are required to list all the activities that you undertake in order to deliver product or service. This usually takes the form of a brainstorming session and lists the steps that are performed leading to selling a particular product or service to customers. Once these activities have been listed they must be laid in the form of a flow chart showing the value adding activities in their order of performance.
The second step is value analysis. When you get to this stage you begin to list what you can do to add more value for each activity that you would have listed in step one. In this step you begin to list the things that your customer place value on in the manner in which that particular activity is conducted. Value factors can be expressed in terms of time, money and right next to each activity you must write down the factors that your customers perceive as value addition as well as what you have to do to convey such value to your customers.
The third and final step in the value chain analysis is to evaluate changes and formulate a plan of action to execute them. This third step comes in three step process as well. The first being to implement the value factors that are easy to implement as well as provide you with high results at an insignificant cost to your team and your...
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