Value Chain Model
For a company to make use of the value chain it must be a low-cost producer, to differentiate its product or service, and to change the competition by enlarging or narrowing the market not served by competitors. Competitive strategies can best be applied where information systems are readily used. There are a series of basic activities that add value to a product or service, which puts it above the competition. The activities of a company that add value can be categorized as either primary or supportive.
Primary activities are related to the production and distribution of a company’s product or service. The primary activities are inbound logistics, operations, outbound logistics, sales and marketing, and service. In relation to Starbucks, inbound logistics is receiving the daily inventory, which consists of milk, coffee beans, pastries, syrups and more. All these materials are stored at each Starbucks location before distributed to the customer. The operations and outbound logistics involve the making and distributing of the coffee to the customer. The finished product is immediately distributed to the customer. Starbucks’ marketing and sales consists mainly through word of mouth, networking, and infrequent advertisements. The company has been able to keep its advertising budget to a minimum while still being successful. The service aspect of the company involves maintenance and repair of Starbucks’ espresso machines, building regulations, and computer systems. Without the maintenance of these items, Starbucks’ would not run as smoothly and successful as it needs to, to remain profitable. All of these activities must be done correct ...