Business Management – Essay Example
Value Chain Management in Marketing Function Michael Porter’s Value Chain Management ideas suggest the need infrastructure, effective human resources management, improved technology, and prompt procurement of raw materials for the profitable management of the production process. His studies clearly connect different strategies of the company at the production level like inbound logistic management, operations management and outbound logistics management. While these three elements aim at the physical management of the product, the company has to create value of the product with marketing and sales management that involves channel selection, advertising, pricing etc. The company’s value can be enhanced with services like the easy access for repair, installation and upgrading of new changes and continued customer care support systems (Porter, valuebasedmanagement.net).
In order to stand fit in the organizational cycle it is necessary to have strong value chain in the company. The value chain is a wider version of industrial process which connects the activities of almost all the department in the operational management. As stated by Ross (1998), “value chain management is the synchronization of competencies along the whole chain to create unique, innovative, and individualized source of consumer value.” (Cited in, Bidgoli 2010, p. 2). The sustainability of profit gain of a company depends largely on the effectiveness of the value chain in it. The suppliers of raw material play a vital role in the operation. They must be prompt and quality oriented and should be adherent to the norms of the company’s purchase policies. Production stopped at any stage means the descent of the company’s value in the market. Another factor for building up stability in the market is the company culture – the formation of a joint passion to work for the promotion of company’s product among all the employees of the company – that helps the organization to deliver the desired business results.
In the case of scenarios of Smart Chips and alike, it is necessary for the management to move more scientifically prepared to face the problem of hacking the unique identity of the original product both technically and legally. The risk factor is more in electronic information business because the material and process involved requires micro level security checks. As the competitor introduces a similar product with more or less equal quality at a lower price, the customer chooses him naturally. Therefore in the worst case of such tactic tug-of-war, it is better to minimize the cost to reduce the price; and the company stands in the long run. Targeting more sales with value offers to customers and bringing up early out lets with more advertisement can help beat the heat. Since the competition is open and inevitable in any business, The Smart Chips Company can stand in the long run only if it reaches its identity of genuine service and product value.
Bidgoli, H. (Ed.). (2010). The Handbook of Technology Management. Hoboken, New Jersey. John Wiley & Sons.
Porter, M. (n.d). Value Chain Framework of Michael Porter. Value Based Management.net. Retrieved from http://www.valuebasedmanagement.net/methods_porter_value_chain.html