Using Porter’s Value Chain Framework, Explain How Technology Can Help an Organisation to Gain a Competitive Advantage

Amazon.com operates in the Online Retail Industry. The sector is one of the fastest growing globally and is outperforming the ordinary retail marketplace. It was created after 1995 and it was only the Internet that made it possible for such an industry not only to be established but to become one of the most flourishing sectors in the business environment. What is interesting is that Amazon.com, together with eBay is the pioneer in the field. Both companies were launched in 1995 and are still extremely successful. The creation of e-mail in 1996 had a huge impact on the development of online retail by introducing a fast and easy way to communicate with customers. For this two-year period Internet usage

Contact point is very vital to customer’s service. It is important that companies should be able to connect and provides customer services throughout their business. It is very important that customer can reach out to a company with any complaints. Therefore it should not be any problems if the customers contacts them about a problem that their having about a purchase product. It is extremely important for the company to make sure that their customers be given exceptional aid. According to Estepon, “in a perfect customer service world, customers should receive the same quality of experience with your business whether they contact you by phone, in person, through email or through your website” (2011). This paper will elaborate on different ways of contact customer point. Nonetheless there are several ways consumers probably would come in contact with companies. Like in person, on the phone, the internet and in-person product support are few of the customers contact points.

The value chain, made by Michael Porter, is really important to see how a company structure is created. The value chain is constituted by two parts: support activities (firm infrastructure, human resource management, technology development, procurement) and primary activities (inbound logistic, operations, outbound logistic, marketing and sales, service). (Johnson et al. 2011, p.97-99)

One of Porter’s main contributions was Porter’s value chain. The value chain is all the activities an organization undertakes to create value for a customer. According to Porter, there are two ways to gain an edge over competitors. A firm must provide comparable but value but perform the activities on the chain at a lower cost, or; Perform services in a unique way

“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).

Effective value chain as a competitive advantage can contribute significantly to the prosperity of a firm in the competitive arena, but it can cause dire situations if not operated properly (Guy, 2011). However, there are conflicts among companies as to how stakeholders think they gain competitive advantage. Porter (1996) suggests: A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at lower cost or do both.

Value chain is the ability to take a product and add some value along the way to make it appealing to the customers in such a way that they be willing to buy the product at a certain price. Many companies in today’s business world analyze their value chains to identify the ways which continue to attract their customers. The value chain analysis consist of two parts, primary activities and secondary activities. The first ones support the actual physical process of buying, manufacturing, shipping and selling the product and the secondary activities are actions that support the process, such as procurement, technical support and human resource management.

Value chain is the ability to take a product and add some value along the way to make it to appeal to the customers in such a way that they be willing to buy the product and pay the asking price. Many companies in today’s business world analyze their value chains to identify the ways which continue to attract their customers. The value chain analysis consist of two parts, primary activities and secondary activities. The first ones support the actual physical process of buying, manufacturing, shipping and selling the product and the secondary activities are is actions that support the process, such as procurement, technical support and human resource management.

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

According to Turban and King (2003), internet technology renders retailers an additional channel for branding, transactions and customer relationship management, the adaptation of which may drive down retailers’ transaction costs, and ensuring faster and higher quality of customer interactions, resulting in enlarging the existing markets and consumer base. M&S realizes this and have tried to sell clothing via high street stores as well as via internet though they have experienced cost cutting, rationalisation and management changes in order to revive their business in recent years. Internet technology might enable sustainable competitive advantage, but problems remain on how to physically organize their online retail operations.

Competitive Advantage: Creating and Sustaining Superior Performance, by Michael E. Porter. Author focused on three principle strategies that a firm can use to neutralize competition areas. low cost differentiation products, superior performance, and competitive technology. The profit potential of any organization can be truly determined by total 5 competition areas. 1 Jockeying for a position, 2 new competitors 3 substitute products/services threats 4 Raw materials power of suppliers 5. Organization customer bargaining power. Value chain is a tool that can be used to analyzing large number of value producing activities to determine customer segment need. Competitive advantage through low cost focus on ten major factors; economics, learning, capacity utilization, linkage within value chain, business interrelationships unit, vertical integration, Business cycles timing purchases, discretionary policies, location, and institutional factors. Two main area an organization achieve cost advantage is controlling cost drivers and two

With help of the following value chain I analysed the activities of the company. It connects the company analyses and the strategy development – we can also see the strengths and weaknesses of the company which we can use to moderate a corporative strategy for the company profile.

• Using multiple approaches to evaluating the strategic landscape is helpful in determining strategic opportunities. • Here, we look at three such approaches: – Porter’s five forces model of the competitive advantage of firms – Porter’s value chain model of internal organizational

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.

Consumers have many choices when deciding where to purchase their goods. While retailer managers are deciding how to win the consumer’s business and increase revenue, they are also constantly trying to figure out ways to reduce costs. Technology helps retail managers improve areas of inventory and supply chain management as well as customer satisfaction and loss prevention (Green, 2002). This paper explains how technology