Value Chain Analysis

Value Chain Analysis

Introduction

The Value chain is a chain of activity which operates in a particular industry. The value chain analysis can be used for strategic planning and building organization model thus resulting in effective leadership model (Chivaka 2007). The Value chain analysis is applied so that firm can develop a competitive advantage and increased shareholders value. Thus in value chain activities are broken down into different categories and value is added accordingly. According to value chain the chain of activities will add more value to the services than the total of the added cost of these activities; this will result in marginal value for that service (Chivaka 2007). If these activities are able to run efficiently than the company will be able to gain competitive advantage and will be able to pay higher payouts.

The value chain of the company is as follow

Primary Activities

Inbound Logistic

The finished product is acquired from all over the world. Most of its suppliers of finished goods are Multi National companies, thus it has to acquire the goods from different sources through land / air and try to minimize the cost of transportation. In most of the cases it is land due to the higher cost associated with the transportation. A data base is used for acquiring and reviewing the products, thus whole system is centralized. This enables the company to reduce its cost and maintain a just in time system, that is acquire when it's needed.

Operations

The main activity of the company is to act as a distributor of various brands from all over the world. In few of the cases the company does the packaging itself, but in most of the cases the company acquires the product in packaged form .The company when receives the good stores it in the main ware house which is divided into different sub ware houses. Each product in the ware house is stored according to the category. Like cosmetic is stored in a different space and eatable goods are stored in a different area. The products are also tested in the venue to check for the quality of the product delivered to them .So that they may be transferred forward accordingly.

Services

The company has its own complain centre which listen to the queries of its customers. The company also provides the information regarding the product to the customer's .The service department also provides replacement of goods and checks the validity for the replacement (Traven Bogd 2012). Since in the case of LG they provide the warranty at local level thus service department plays the relevant role.

Outbound Logistic

The company has its own Truck which shifts the product to various markets all over the country. This cost is beard by the company on its own and transferred to the end consumer in the form of product cost (Quick mba 2012).The company has a sales channel which is divided into Pre-selling, Hot selling, Pharmacy, and to sub distributors. They provide the product to super markets, Hypermarkets, Chain supermarkets and Small ...