In order for any company or organization to enhance and maintain its competitive strategy, it is imperatively important for it to understand and appreciate the dynamic and complex client needs as well as its capabilities. Emergent research shows that a firm’s profitability depends highly on the management of the wide ranging activities that are characteristic of its value chain. Indeed, specific factors such as the price the clients are willing to pay in relation to the value of the products are of paramount importance and need to be analyzed upfront. The value chain framework that was proposed by Porter is an instrumental tool that can be used to determine the capability of my organization in light of its strengths and weaknesses. Timely acknowledgement of these is important as it would enhance the maximization of value creation and concurrent minimization of costs (Lynch, 2003).
In light of Porters model, the firm comprises of primary activities and support activities that share intricate and augmenting relationships (Porter, 1985). Notably, the marketing and sales departments have exhibited exemplary performance as they have provided other departments with accurate and reliable data with respect to sales forecast. Nonetheless, it is not certain whether this data has been provided in a timely manner market analysis shows that competitors also have this information. The procurement department has presented its concerns with regard to availability of raw materials. Reportedly, suppliers have increased the price because of the high demand. This will probably have a direct impact on the end product. In particular, the price might be slightly higher in order to secure the profit margin. However, before making the final decision in this respect, it is important to review the status of competitors. Collaborating with down stream channels and upstream suppliers as well as customers according to Macmillan and Tampoe (2000) is also influential in price determination.
However, the firms financial stability has ensured timely attainment of the raw material and hopefully, inbound logistics would speed up the operations to ensure that the product reaches the market in a timely manner. Regardless of this, it is important to eliminate delays with respect to acquisition of vital information and timely communication to relevant parties. The sales and marketing departments definitely need to align its operations on the principle of effectiveness. Enhancement of infrastructure and technology to ensure that inherent operations are lean would also ease communication within the firm. Analysis of competitors’ value chains shows that they are also grappling with this shortcoming. Effecting it promptly would therefore enhance the firm’s competitiveness and empower it to stay ahead in the market.
Porter’s value chain framework has been instrumental in identification of the firm’s weaknesses and strengths. From the analysis, it is certain that the firm’s financial stability is a strengthening factor as it has enabled it to overcome the glaring challenges. However, it needs to improve its technological and infrastructural capacity in order to enhance its performance. This has been based on a critical analysis of its current status in light of the position of its competitors as well as the perceptions of upstream supplies, customers and downstream channels. However, two main issues need to be addressed in order to qualify the entire process. To begin with, what are the most credible sources of information for value chain analysis? Then, since the firm can not have all the resources required for production, what are the implications of outsourcing on value chains?
Lynch, R. (2003). Corporate Strategy, 3rd Edition. USA: Prentice Hall.
Macmillan, H. & Tampoe, M. (2000). Strategic Management. Oxford: University Press.
Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press.
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