THE APPLICATION OF VALUE CHAIN ANALYSIS IN THE MANUFACTURING COMPANIES: A SURVEY OF QUOTED MANUFACTURING FIRMS IN NIGERIA
AZUBUIKE VERA M.U.
DEPARTMENT OF BUSINESS ADMINISTRATION UNIVERSITY OF ABUJA
The United Nations International Trade Laws (The UNCITRAL Model) which replaced the old law of trade and tariff, emphasizes high quality goods, works and services, economy and efficiency, in order words, value for money. The aim of the paper is to check the level of application of the concept of value analysis by manufacturing companies in Nigeria, and the outcome of the application so far, by answering such question as: Are manufacturing companies in Nigeria fully aware of the concept of value chain analysis? Is value analysis applicable in Nigerian operating environment? Is there improvement in companies’ performance as a result of the application of value analysis? The research Hypothesis here is to check the differences in the level of ‘values’ achieved by Nigerian manufacturing firms. If the amount of income realized actually means higher or lower value. Due to the nature of this paper, data were gathered from secondary source only; up to 5 years of annual reports of selected Nigeria manufacturing companies from different sectors like Breweries, food and beverage, conglomerates etc were analyzed. The simple percentage and Bar charts were used to present and explain the findings while the chi-square model was used to test hypothesis, then it was found that the Firms produce relatively the same value level, irrespective of the differences in their actual total income.
THE APPLICATION OF VALUE CHAIN ANALYSIS, A SURVEY OF QUOTED MANUFACTURING FIRMS IN NIGERIA
The essence of operations function is to add value during the transformation process. Value-added is the term used to describe the difference between the cost of inputs and the value or price of out puts. Stevenson (1999):7)
This paper focuses on the applicability of value chain analysis to manufacturing firm in Nigeria and how vital it can be if a firm wants to compete in an ever dynamic market that is often characterized by higher levels of competition and growing consumer base.
The paper tries to identify how value chain activities are tied together to create value for the consumers and how it can be used in identifying and understanding crucial aspects to achieve competitive strengths and core competencies in the market place.
The aim of the paper is to check the level of application of the concept of value analysis by manufacturing companies in Nigeria, and the outcome of the application so far by answering such question as: -
Are manufacturing companies in Nigeria fully aware of the concept of value chain analysis? -
Is value analysis applicable in Nigerian operating environment? -
Is there improvement in companies’ performance as a result of the application of value analysis?
This study is being restricted to a representative fraction of quoted manufacturing companies in Nigeria. More so, it will be over ambitious to carry out this investigation in details based on all facets of value chain analysis of Nigerian Companies thus the study is restricted to only the major issues of application.
This research seeks to encourage Nigerian quoted manufacture Companies to continue to make significant investment in value chain capabilities because, volume growth, material cost reduction and efficiency programmes will improve margins. More so, value chain, when appropriately used, makes the implementation of competitive strategies more systematic overall. THEORETICAL CONSIDERATION AND LITERATIVE REVIEW
value – chain is the linked set of value creating activities all the way from basic raw materials sources for component supplies through to the ultimate end – use product or service delivered to the customer (Drury 2008): 15). Value analysis according to Stevenson (1999): 697)...
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