Chapter 8 Flashcards
What is value chain analysis?
A series of activities, each of which adds value.
How do Johnson and Scholes define the value chain?
The activities within and around an organisation which together create a product or service.
Who is associated with the development of the value chain concept?
Michael Porter
What are the two main components of a business entity’s value chain according to Porter?
- Primary value chain
- Support activities
What does inbound logistics in the value chain refer to?
Activities concerned with purchased material components receiving, handling, and storing until needed.
What activities are included in inbound logistics for a manufacturing company?
- Materials handling
- Transport from suppliers
- Inventory management
- Inventory control
What does operations in the value chain involve?
Activities concerned with converting the purchased materials into an item that customers will buy.
What activities are part of operations in a manufacturing company?
- Machining
- Assembly
- Packing
- Testing
- Equipment maintenance
What does outbound logistics encompass?
Activities concerned with the storage of finished goods before sale, and distribution & delivery of goods or services to the customers.
How does outbound logistics relate to service industries?
It relates to delivery of a service at the customer’s own premises.
What are the 4Ps of marketing in the value chain?
- Product
- Place
- Price
- Promotion
What activities are associated with marketing and sales in the value chain?
How to attract, persuade, exploit customers and sell products to them.
What does the service aspect of the value chain include?
- Managerial installation
- Warranties
- Repairs and maintenance
What role do customer service centers play in the value chain?
They handle activities that occur after the point of sale.
True or False: The nature of activities in the value chain is the same across all industries.
False
What is a key characteristic of the primary value chain?
It is valid for all types of business entities.
What are support activities in the context of the value chain?
Activities that create value within each primary activity.
What is the role of purchasing in support activities?
Concerned with buying resources for the entity.
How can purchasing add value?
By lowering purchase costs or securing sources for key materials.
What does human resource management involve?
Recruiting, training, developing, and rewarding people in the organization.
How does human resource management add value?
By improving the skills of employees through training.
What is included in technology development?
Introduction of new IT systems and acquiring knowledge (R&D).
True or False: Support activities are often seen as unnecessary overheads.
True
What is the role of corporate infrastructure in creating value?
It relates to the organization structure and its management systems.
How can corporate infrastructure create value?
By providing better management information systems for decision-making.
What does technology development include?
Planning and finance management, quality management, and management information systems.
How can technology development add value to operations?
Through the introduction of a new IT system.
Fill in the blank: _______ can add value by identifying cheaper sources of materials or equipment.
Purchasing
What are the primary activities in the value chain?
Inbound logistics, operations, outbound logistics, marketing and sales, and service.
What are support activities in the context of the value chain?
Activities that create value within each primary activity.
What is the role of purchasing in support activities?
Concerned with buying resources for the entity.
How can purchasing add value?
By lowering purchase costs or securing sources for key materials.
What does human resource management involve?
Recruiting, training, developing, and rewarding people in the organization.
How does human resource management add value?
By improving the skills of employees through training.
What is included in technology development?
Introduction of new IT systems and acquiring knowledge (R&D).
True or False: Support activities are often seen as unnecessary overheads.
True
What is the role of corporate infrastructure in creating value?
It relates to the organization structure and its management systems.
How can corporate infrastructure create value?
By providing better management information systems for decision-making.
What does technology development include?
Planning and finance management, quality management, and management information systems.
How can technology development add value to operations?
Through the introduction of a new IT system.
Fill in the blank: _______ can add value by identifying cheaper sources of materials or equipment.
Purchasing
What are the primary activities in the value chain?
Inbound logistics, operations, outbound logistics, marketing and sales, and service.
