Firm as a Value Chain

Question 1

Value chain

Answer 1

series of value adding activities that occur as a product moves from R&D concept to raw materials through production to final distribution and after sales services

Question 2

vertical integration

Answer 2

when a company owns the entire value chain or at least a significant part of it

Question 3

Value chain: supporting activities

Answer 3

firm infrastructure
human resources/management
technology development (R&D)/ information systems
procurement (sourcing and logistic)

Question 4

value chain: primary activities

Answer 4

inbound logistic/ operations
product design
marketing and service
outbound logistic

Question 5

firm infrastructure

Answer 5

classic overhead function, like accounting, finance, legal, safety and security and quality control, which all firms perform

Question 6

human resources management

Answer 6

recruiting, developing, motivating, and rewarding the workforce

Question 7

procurement

Answer 7

transportation, storage, distribution of materials+equipment neccesary to conduct primary activities

Question 8

technology development (R&D/ information system)

Answer 8

managing information processing, overseeing information system, intergrating tech platform

Question 9

product design

Answer 9

design product

Question 10

inbound logistic/ operation

Answer 10

coverting inputs into a finished product in terms of sourcing components, arranging supply chains, configuring plant location, and optimizing manufacturing proccesses

Question 11

outbound logistics

Answer 11

moving finished product from operation to wholesalers, retialers or end consumers. Deals with distribution channels, inventory management, warehousing, transport

Question 12

marketing

Answer 12

inform buyers about products, develop sales force , devising packaging schemes, definining brand, devising promotion

Question 13

service

Answer 13

serving customers with installation support, after sales service and training

Question 14

outsourcing

Answer 14

when a firm externalizes (contracts out to another firm) certain functions
eg. IT functions, manufacturing, contract R&D, back office functions
can be at home or abroad
cheaper/ closer to customer/ R&D cluster/ tariffs/ language/ distance

Question 15

off-shoring

Answer 15

when a firm shift a function oversea overseas
does not neccessarily change ownership
focus on labour cost (skilled IT at lower cost)
risk of outsourcing (loss of IP, creating rivals)

Question 16

reshoring

Answer 16

returning an activity from the foreign location to the country where the work had originally been done (not neccessarily home country)
reasons: closer to market,. faster response, shorter logistics
close to RD/ ,manufacturing
reputational boose