Etienne Nel The trustless business environment is a pioneering space and therefore an ideal environment in which entrepreneurs can launch new products and services without having to compete against corporates — or even other established businesses. As Bitcoin was the first to show, trustlessness is actually a form of distributed trust. Individuals agree on a way to transact and a system is devised that enforces the agreement.
Communications Information systems Note that many of these technologies are used across the value chain. For example, information systems are seen in every activity.
Similar technologies are used in support activities. In addition, technologies related to training, computer-aided design, and software development frequently are employed in support activities.
To the extent that these technologies affect cost drivers or uniqueness, they can lead to a competitive advantage. Rather, one value chain activity often affects the cost or performance of other ones.
Linkages may exist between primary activities and also between primary and support activities. Consider the case in which the design of a product is changed in order to reduce manufacturing costs. Suppose that inadvertantly the new product design results in increased service costs; the cost reduction could be less than anticipated and even worse, there could be a net cost increase.
Sometimes however, the firm may be able to reduce cost in one activity and consequently enjoy a cost reduction in another, such as when a design change simultaneously reduces manufacturing costs and improves reliability so that the service costs also are reduced.
Through such improvements the firm has the potential to develop a competitive advantage. Analyzing Business Unit Interrelationships Interrelationships among business units form the basis for a horizontal strategy.
Such business unit interrelationships can be identified by a value chain analysis. Tangible interrelationships offer direct opportunities to create a synergy among business units. For example, if multiple business units require a particular raw material, the procurement of that material can be shared among the business units.
This sharing of the procurement activity can result in cost reduction.
Such interrelationships may exist simultaneously in multiple value chain activities. Unfortunately, attempts to achieve synergy from the interrelationships among different business units often fall short of expectations due to unanticipated drawbacks. The cost of coordination, the cost of reduced flexibility, and organizational practicalities should be analyzed when devising a strategy to reap the benefits of the synergies.
Outsourcing Value Chain Activities A firm may specialize in one or more value chain activities and outsource the rest. The extent to which a firm performs upstream and downstream activities is described by its degree of vertical integration.
A thorough value chain analysis can illuminate the business system to facilitate outsourcing decisions. To decide which activities to outsource, managers must understand the firm's strengths and weaknesses in each activity, both in terms of cost and ability to differentiate.
Managers may consider the following when selecting activities to outsource: Whether the activity can be performed cheaper or better by suppliers. Whether the activity is one of the firm's core competencies from which stems a cost advantage or product differentiation.
The risk of performing the activity in-house. If the activity relies on fast-changing technology or the product is sold in a rapidly-changing market, it may be advantageous to outsource the activity in order to maintain flexibility and avoid the risk of investing in specialized assets.
Whether the outsourcing of an activity can result in business process improvements such as reduced lead time, higher flexibility, reduced inventory, etc. The Value Chain System A firm's value chain is part of a larger system that includes the value chains of upstream suppliers and downstream channels and customers.
Porter calls this series of value chains the value system, shown conceptually below:Study Marketing Management chapter 2 practice test flashcards taken from chapter 2 of the book Marketing Management.
Sign in. Sign in. the traditional marketing approach would be the best approach to follow B) the producers must consider themselves as a part of the value-chain process While viewing businesses in terms of customer needs.
Does McDonald's offer a model which other businesses should follow? At first, most people must have laughed at the idea of a chain of restaurants selling identical products all over the country, but little did they know that the genius idea that they had mocked would go on to revolutionise the business environment of the future.
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SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats.
Strengths and weaknesses are internal factors. Opportunities and threats are external factors. Our Business Model Business Model The power of our franchisees, suppliers and employees working together toward a common goal is what makes McDonald’s the world’s leading quick-service restaurant brand.
Business Model by McDonald's; Business Model by McDonald’s Essay Sample.
The whole doc is available only for registered users OPEN DOC. ). In this modern world, businesses operate in a single market because of globalization and therefore using the same resources in their operations is no longer a problem since the world is .