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Hi
When would you likely to use the model ansoff? is it when it talks about the new and existing products in the industry, also the risks of moving to another market etc. i.e market penetration is finding new customers in existing markets then risk is low.
See the value chain, what do they mean by ADD VALUE? does is mean how to gain competetive advantage? or it means that in the value chain there are secondary activities which adds value (support) primary activities. i.e technology can support the inbound logistics in terms of storing materials, such as EOQ model etc.
Thanks
Ansoff: most common use is when suggesting what could be done to increase profits. You can increase your market share (market penetration), look for new markets or new products, or diversify.
Value chain: the concept of adding value is explaining why a business can make a profit. If a business like a shop were just to buy and sell goods, how can it create a markup? Why don’t its customers buy the goods where the shop does? Here value can be added by providing convenience (you can go to the local shop rather than travel to the manufacturer), the shop gives choice, the shop gives advice, and the shop can use its buying power to negotiate a lower price than an individual could.
When a qs aks to explain the value chain of a company,do we just explain the primar activities or the secondary as well?
Thanks
So does value add mean competeive advantage? can you give another example im quite confused
yes i would explain both primary and secondary. And talk about how secondary supports its primary activities. e.g Human resource, coompetent workers are needed to maintain the whole value chain.
If the Q asks you to explain the value chain then you must do all of it – primary and support activities.
Competitive advantage means beating your competitors. That implies adding value (so as to make profits) but the terms are different.
You could argue that Apple has competitive advantages when making phones as iPhones seem to do better then others (thought Samsung might be catching up). Apple adds value ot its iPhone operations principally by its design of the hardware and the interface. Purchasers pay a lot for the design of the product.
Samsung also adds value though well made phones. They might not be as innovative as Apple, but Samsung’s manufacturing process is good.
It might be possible to say that the firm that is best at adding value will be the one that has competitive advantage.
Hi thank you that explains it.
Would we need to draw value chain for exam, if so will we be awarded any additional marks?
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