Know-How Exchange : Student Questions

Hi Aleem,

If I am not wrong you from Symbiosis Institute of Business Management, Pune! Assignment..! As you know the value chain is a systematic approach to examining the development of competitive advantage. The chain consists of a series of activities that create and build value.

The organisation is split into 'primary activities' and 'support activities. Take your example: amazon.com. It is one of the first major companies to sell goods over the Internet and was one of the iconic stocks of the late 1990s dot-com bubble. After the bubble burst Amazon faced skepticism about its business model, but it made its first annual profit in 2003

A} Primary Activities

1. Inbound Logistics
Here goods are received from a Amazon’s suppliers. They are stored until they are needed to sale online.

2. Operations
Individual operations could include room packing of books/videos/games by an online retailer or customers.

3. Outbound Logistics
The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer.

4. Marketing and Sales
In true customer orientated fashion, at this stage the Amazon prepares the offering to meet the needs of targeted customers. This area focuses strongly upon marketing communications and the promotions mix.

5. Service
This includes all areas of service such as installation, after-sales service, complaints handling, and web training so on.

B} Support Activities

1. Procurement

This function is responsible for all purchasing of goods, services and materials. The aim is to secure the lowest possible price for purchases of the highest possible quality. They will be responsible for outsourcing (components or operations that would normally be done in-house are done by other organisations), and E- Purchasing (using IT and web-based technologies to achieve procurement aims).

2. Technology Development

Technology is an important source of Amazon’s competitive advantage. Amazons has innovated to reduce costs and to protect and sustain competitive advantage. This could include production technology, Internet marketing activities, lean manufacturing, Customer Relationship Management (CRM), and many other technological developments.

3. Human Resource Management (HRM)

Employees are an expensive and vital resource. Amazon manages recruitment and selection, training and development, and rewards and remuneration. The mission and objectives of the Amazon.com would be driving force behind the HRM strategy.

4. Firm Infrastructure

This activity includes and is driven by Amazon’s corporate or strategic planning. It includes the Management Information System (MIS) and other mechanisms for planning and control such as the accounting department.

I hope this will help!

Regards,

M Bhor