Value chain is a conceptual framework that link customer needs , performance characteristics and attributes of a product or service with the activities, resources and capabilities that enables such characteristics and attributes to be produced ,also it may help to develop and identifying potential valuable resources and capabilities control which may eventually to create a competitive advantage to the firm .different may have different position to enter in the industry ,company may choice the economical position to enter the market after the value chain analysis . While outsourcing is an activities that purchase of a value-creating activity form an external supplier, the analysis of values chain help the firms to identify which part of the activities, recourse, capabilities are in limited or need to be developed to crate a competitive advantages , since unless the company are huge enough, an ordinary company may not have the capabilities to possess all the resources they needed form raw material, work in process and final products or the services provided. as outsourcing can be in serviced or produced . For example the low cost cell phone producer XUMI(小米)which outsourced the manufacturing and produced to the Foxconn which one of the world largest 3C product OEM firm, in XUMI cases, the outsourcing of the manufacturing process give help to the company to improve their values adding capabilities and obtain competitive advantages as XUMI have the TOP market share gain in low cost cell phone market in China ,also Foxconn provide a leader class standard of manufacturing , outsourcing of this may give the XUMI a possible to keep the cost down as , if XUMI decided to use a manufacturing on its own the cost of manufacturing plant, employee, the skilled labor, machinery will be a huge production cost toward XUMI and XUMI may not be use the high performance/cost ratio ( which’s mean a product or device is in low price but have a good performance and quality ) as the cost of manufacture are huge 1b
Company should have analysis the risk of using the independent supplies , such as the stability of the supplies. Will the supplies liquidate in short term? As a long terms of partnership is a key measurement to develop a substantable competitive advantages . moreover the outsourcing services or product should be without doubt in line with the company’s strategy and illegal .
The risk of outsources the activates may be a moral and ethical or illegal ,take the case of XUMI in question in 1a , the Foxconn not only be the XUMI OEM manufacturer also apple does, a issues roused up is the working environment and suicide case in the plant, Foxconn employee have often comment suicide in the manufacture plant and it contribute to the lower wage and long working hours .this result that the conpamny’sbrand image may devalue and may be face legal dispute .
Moreover sometime the outsourcing supplies may be illegal , say in some developing counties child labor are commonly seen , although the local law are prohibit to do so , while the supplies may not obey and use the child labor to keep the labor as low as possible.Q.2a Differentiation means a company strategy to distinguish their product or services apart from rivalry which is substitutes but not perfect substitutes. ,which let the consumer feel the product or services are more attractive so as to create a competitive advantages to competitor . which give the company gave the room to achieve above average return. The base of Product Differentiation are attributes of the products or services a firm sells, relations between a firm and its customer and links within and between the firms. First attributes of the products or services a firm sells include product features, product complexity ,the timing of production and location, second relations between a firm and its customer consist of product customization, consumer marketing and product...
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