Value Chain

Strategies, Forces, and Tactics in Competitive Markets

c. Strategies:

Differentiation Develop products & services which are different from what the competition offers superior attributes distinguishing features

Competitive Strategies
Competitive Advantage
Lower Cost Differentiation

Broad Target
Competitive Scope

Cost Leadership

Differentiation

Narrow Target

Cost Focus

Focused Differentiation

Strategies, Forces, and Tactics in Competitive Markets

Cost leadership

based on efficient operations based on effective operations economies of scale

become a low cost producer market segmentation (niche)

Focused differentiation

Market niche narrow market & low cost

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Cost focus

Value Chain Analysis of Strategic Opportunities

Definition: Value chain- consists of the major activities that have been added to the product during its creation, development or sale. Primary activities : the creation of product or service

inbound logistics - order entry data collection, obtain raw materials, subassemblies Operations - order processing, MRP; transformation of inputs to finished goods
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Value Chain Analysis of Strategic Opportunities

Primary activities : the creation of product or service

Outbound logistics - distribution & sales data; storing products, Marketing sales - promotions, discounting; establishing a customer need Service activities - calls, returns, product rotation and maintenance
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Value Chain with Typical Strategic IS Mapped onto it

EDI-Based Purchasing System Inbound Logistics

ComputerIntegrated Mftg. Operations

Automated Ordering System Outbound Logistics

Expert Systems for Salespeople Marketing and Sales

Telemaintenance Expert Systems Service

Upstream Chains of Suppliers

Downstream Chains of Customers

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Value Chain Analysis of Strategic Opportunities

Support activities: The required infrastructure

Org's infrastructure Human resources Technology Procurement

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Value Chain Analysis of Strategic Opportunities

Z-1992 fig 5.5 & 5.6

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Strategic Systems in Operations

A. Manufacturing

CIM MRP II

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5.6 Strategic Systems in Operations

Z Figure 5.7 p166

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Strategic Systems in Operations: Manufacturing

System CIM FMS CAD / CAM MRP II Benefit Control of entire process Units of 1 Configuration control for each customer Reduced inventory costs Reduced cycle time

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Strategies for CIM and BRP

Fjermestad & Chakrabarti, 1993

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