Examples Of Value Chain Analysis

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CHAPTER 2 BUSINESS ISSUE EXPLORATION 2.1. Conceptual Framework 2.2. Research Method 2.3. Analysis of Business Situation 2.3.1. Internal Analysis 2.3.1.1. Resource Based View 2.3.1.2. Value Chain Analysis R. Duane Ireland in The Management of Strategy Concepts and Cases describes that value chain analysis allows the firm to understand the parts of its operations that create value and those that do not. Understanding these issues is important because the firm earns above average return only when the value it creates is greater than the costs incurred to create the value. A firm’s value chain is divided into primary activities that are involved with a product’s physical creation, its sales and distribution to buyers, and its service after the…show more content…
Company has good relationship with several reliable machinery suppliers so if company plan to purchase new tools or equipment, it is possible for company to ask lower price. In recent years, company was handling ground water drilling for small housing compound in Bandung. There are numerous housing compound are built in Bandung and company is planning to cooperate with housing compound developer in the future. ABC Ground Water Drilling Service Company cooperates with Badan Geologi when there is order from customer with depth more than 100 meters. Drilling process for depth more than 100 meters will require permit from authorized institution, Badan Geologi. 9. Cost Structure Cost Structure of ABC Ground Water Drilling Service Company is divided into 2 categories, fixed and variable cost. Fixed cost will remain the same whenever there is increasing or decreasing in sales such as staff salary and tools purchasing or maintenance. On the other hand, fuel for machine and permit fee are categorized as variable cost since they are depend on number of…show more content…
Experienced senior driller is an advantage for company because he will be able to manage and train junior drillers in operational activities. Company also employ consultant which occupied by son of company founder. Consultant of the company has high experience in drilling process and all related activities in drilling. Consultant of company trains all driller periodically to ensure that all driller have good knowledge in ground water drilling process. • Good after sales service ABC Ground water Drilling Process has staff who responsible to follow up customer after drilling process was done but currently, after sales service staff also responsible to handle finance function in company. Although these two functions are handle by one staff, after sales service of company still run well in overall. Within 1 to 2 months after drilling process, after sales service staff will call customers to ask company performance in detail. • Provide service warranty Service warranty is given to all customers and valid since drilling process was done until 6 months ahead. There will be no additional charges if customers experience problem related to drilling service that they
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