A group of linked activities are held respectively in order to service a product or market service in a particular industry . Also it is a system that helps to organize inputs and output after that go to customer . For companies that produce goods, the value chain starts with the raw materials used to make their products, and consists of everything that is added to it before it is sold to consumers. (Kaplinsky, (2001)
' The concepts of value in chain analysis
1-Purchased Supplies Inbound logistics: Is all that refers to involved in receiving, storing and distributing the raw materials used in the production process.
2-Operations: This is the stage which material conversions from input to output .
3-Outbound logistics: This is the stage which classification and distribution of the final product to consumers.
4-Sales and Marketing: each product needs promotion and advertising in order to reach the customers . In this stage involves activities like advertising, promotions, sales-force organization, selecting distribution channels to marketed everything related to product .
5-Service: This refers to the activities that are needed to maintain the product's performance after it has been produced.
Also there are some activities that help the primary functions and comprise the following:
a-Procurement: This helps in how the raw materials for the product are got it.
b-Technology development: now a day technology is a basic thing in the industry so can use technology in the development of a product, including in the research and development stage, in how new products are developed and designed, and process automation.
c-Human resource management: These are the activities involved in hiring and retaining the proper employees to help design, build and market the product.
D-General administration : This refers to an organization's structure and its management, planning, accounting, finance and quality-control mechanisms .
Q2 : Choose an organization of your choice and explain what happens in each stage of Value Chain showing uses of I.S to add Value .
Starbucks As An Example Of The Value Chain Model:
Starbucks Corporation is an American coffee company and coffeehouse chain. Starbucks was founded in Seattle ,And know it has branches in every country .
1. Inbound Logistics:
The inbound logistics for Starbucks refers to selecting the finest quality of coffee beans by the company appointed coffee buyers from coffee producers in Latin America. In the case of Starbucks, the green or unroasted beans are procured directly from the farms by the Starbucks buyers. These are transported to the storage sites after which the beans are roasted and packaged. These are now ready to be sent to the distribution centers few of which are company owned and some are operated by other logistic companies.
2. Operations: Starbucks operates in 65 countries either in the form of direct stores operated by the company or as licensed stores. Starbucks has more than 21,000 stores internationally which includes Starbucks Coffee, Teavana, Seattle's Best Coffee and Evolution Fresh retail locations.
3. Outbound Logistics : There is very little or no presence of intermediaries in product selling. Majority of the products are sold in their own or licensed stores only. As a new venture, the company has launched a new range of single-origin coffees which will be sold through some leading retailers in the U.S .
4. Sales and Marketing: Starbucks invests in superior quality products and high level of customer services than aggressive marketing.
5. Service Starbucks aims at building customer loyalty through high level of customer service at its stores.
1-Technology Development: Starbucks is very well known for use of technology not only for coffee related processes (to ensure consistency in taste and quality along with cost savings) but to connect to its customers. Many customers use Starbucks stores as make a shift office or meeting place because of the free and unlimited wifi availability.
2- Human Resource Management: The company's committed workforce is considered a key attribute in the company's success and growth over the years. Starbucks employees are motivated through generous benefits and incentives. The company is known for taking care of its workforce and this is perhaps the reason for a low turnover of employees, There are training programs conducted for employees in adjusting of a work culture which keeps its staff efficient and motivated.
3- General Administration :This includes all departments like management, finance, legal, etc which are required to keep the company's stores operational. Starbucks well designed and pleasing stores are complemented with good customer service provided by the dedicated team of employees in green aprons.
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