Describe the Methods Used to Calculate Value Added. How Does Value Added Contribute Towards Understanding the Connections Between the Business and Its Product Markets? Use Relevant Examples to Illustrate Points.

In order to accomplish the organization’s goals, the product differentiation and positioning strategies will be used. In some cases both will be used while other goals will only use one of the strategies. To meet the ticket sales goal of being in the top one third of the league both will be used. Product differentiation will be used by showcasing the elite

“Competitive Advantage introduces the concept of the value chain, a general Framework for thinking strategically about the activities involved in any business and assessing their relative cost and role in differentiation”. Michael Porter, (1985).

The basic principle in defining the value chain, according to Michael Porter (Porter, 1985), is that the activities include a variety of disaggregations from the below three perspectives. First, they have different economics, implying that these activities are functioning in different segments of the market. Second, even though the economics differentiation is not that evident, isolated activities should have a potential impact for it. Third, value-adding activities have significant input scale.

Value chain analysis looks at every step a business goes through, from raw materials to the eventual end-user. The goal is to deliver maximum value for the least possible total cost. It is a systematic approach to examining the development of competitive advantage. The most basic breakdown of primary functions includes inbound logistics, operations, outbound logistics, sales and marketing and service. People should use the other models and frameworks within this software to further differentiate between, and add to, these domains. Product Innovation is one area that is not normally included in the de jure model but is often included in the de facto model. Value Chain Analysis describes the activities that take place in

n perfectly competitive industries, there are such a large number of firms, each producing such a small proportion of the industry’s output, each firm cannot, by its own independent action, affect the supply or the price. The degree to which firms can influence the price of their product through their own strategy depends upon market structure. Perfectly competitive market structure is a market situation where there arelarge number firms producing a homogeneous productand there are large numbers of byers demanding the same products. In such a market every firm considers that it can sell any amount of output at the prevailing market price.Similarly, there is no restriction for the byers to purchase any amount from the

Value creation means increase the value of products, service and even business to meet the customers’ needs and requirements so that they can get competitive advantages. (Business Fundas, 2012) As we analyzed, fast food industry’s threat of new entrants is low and the availability of substitutes is high. It’s a fare market which the buyers have strong powers.

Increase customers’ value by adding value to features of the products, improve customer service by being more responsive, increase the range of complementary products and modify as per orders. Differentiation should promote long-term profit and growth. Moreover to benefit from cost advantage, identify both primary and support activities are clearly identify, required a strong know1egde of organization value if value chain will disrupt. Analyse how to create customer value, recognize cost drivers from each activity and identify between link activities by reducing cost from one to

As defined in Marketing the Core, product differentiation is a corporate strategy whereby there is “a provision of something that is unique and valuable to

In a word, value chain analysis is the most fundamental part for all kinds of businesses to do process optimization, enhance the overall business performance, and create competitive advantage. And it will give the business a sort of mind about the internal strengths and weaknesses to help them win the competition.

2. Product Homogeneity: All the firms produces homogenous product. A buyer cannot differentiate among the products produced by different firms, and hence pay a uniform price for the goods produced by different firms. The assumptions of large number of sellers and of product homogeneity imply that the individual firm in immaculate rivalry is a price-taker, and therefore the demand curve is considerably elastic, representing that the firm can offer any quantity of yield at the prevailing market price (Figure

The value chain analysis (shown in appendix) was also generated by Michael Porter. This model is referred to “identifying ways to increase the efficiency of the chain” (Investopedia, n.d.). Furthermore, the overall objective is to produce maximum value with minimum total cost and establish a competitive advantage.

Describe how value-added is calculated. To what extent are value added, cash flow, and profit connected to a company’s sales performance?

The value chain shows the internal steps a company or organization takes to transform inputs into outputs (Jurevicius, 2013). As the products pass through each stage or activity, value is added until they ultimately are ready to reach the consumer. Value chain analysis a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation (Jurevicius, 2013). The use of value chain analysis differs from small companies to large corporations. Ultimately, value chains are examined to increase performance of the company, whether it be with respect to cost, or productivity.

Value chain analysis has proven to be a useful tool for knowing how an organization can create the greatest value for its customers. Michael Porter (1985) in his book competitive advantage states that “understanding how a business creates value are essential elements for developing a competitive advantage.” [1]. According to porter (1985) value chain is “the process view of an organization, the idea of seeing an organization as a system, made up of subsystems each with inputs, transformation processes and outputs.” [2]. Porter argued further that transforming inputs into outputs involves acquisition and consumption of resources like money, labor, materials, equipment, land, administration and management. Porter highlighted further that the way value chain activities are carried out determines costs and affects the profitability of a business. A much broader definition of a value chain is given by globalvaluechains.org, according to globalvaluechains.org; value chain is defined as the “full range of activities that firms and workers do to bring a product from its conception to its end use.” Globalvaluechains.org states further that the main activities that make up a value chain includes product design, production, marketing, distribution and support to customers. Porter divided business activities of traditional organizations into two main categories; primary activities and secondary activities. The primary activities are directly linked to transforming inputs

I. Generating Value A. Evaluate how the company (Nissan) in the case study uses operations management functions to provide products and generate value for its customers. Support your claims with examples from the case study or outside sources.