Assessing the InternalEnvironment of the Firm

Value-Chain Analysis

Value-chain analysis a strategic analysis of an organization that

uses value creating activities.Value is the amount that buyers are

willing to pay for what a firm provides them and is measured by total revenue

Value-Chain Analysis

Primary activities contribute to the physical creation of the

product or service, its sale and transfer to the buyer, and its service after the sale.

inbound logistics, operations, outbound logistics, marketing and sales, and service

Value-Chain Analysis

Support activities activities of the value chain that either add

value by themselves or add value through important relationships with both primary activities and other support activities

procurement, technology development, human resource management, and general administration.

The Value Chain

Primary Activity: Inbound Logistics

Associated with receiving, storing and distributing inputs to the product Location of distribution facilities Warehouse layout

and designs

Primary Activity: Operations

Associated with transforming inputs into the final product form Efficient plant operations Incorporation of appropriate process

technology Efficient plant layout and workflow design

Primary Activity: Outbound Logistics

Associated with collecting, storing, and distributing the product or service to buyers Effective shipping processes to provide quick

delivery and minimize damages Shipping of goods in large lot sizes to

minimize transportation costs.

Primary Activity: Marketing and Sales

Associated with purchases of products and services by end users and the inducements used to get them to make purchases Innovative approaches to promotion and

advertising Proper identification of customer segments

and needs

Primary Activity: Service

Associated with providing service to enhance or maintain the value of the product Quick response to customer needs and

emergencies Quality of service

personnel and ongoing training

Support Activity: Procurement

Function of purchasing inputs used in the firm’s value chain Procurement of raw material inputs Development of collaborative “win-win”

relationships with suppliers Analysis and selection of alternate sources

of inputs to minimize dependence on one supplier

Support Activity: Human Resource Management

Activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel Effective recruiting, development, and

retention mechanisms for employees Quality relations with trade unions Reward and incentive programs to motivate

all employees

Support Activity: Technology Development

Related to a wide range of activities and those embodied in processes and equipment and the product itself Effective R&D activities for process and

product initiatives Positive collaborative relationships between

R&D and other departments Excellent professional qualifications of

personnel

Support Activity: General Administration

Typically supports the entire value chain and not individual activities Effective planning systems Excellent relationships with diverse

stakeholder groups Effective information technology to integrate

value-creating activities

Value chain Google

Inbound logistics Google does not reveal the details of its supply-chain

management and inbound logistics to the public. The company is reported to be attempting a digital transformation in supply-chain via projects aimed at automated drone delivery of products.

Google maintains a dedicated supplier site, where suppliers can submit invoice for payment, check invoice status and deal with a range of other administrative aspects of their cooperation with the company in a convenient manner.

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Operations Google operates via more than 70 offices in more than 40

countries internationally. Google offices are famous for their creative design and the presence of distinctive features such as sharing cubes, video games, pool tables, pianos, cafes and others. Google headquarters in Mountain View, California consists of about 4.8 million square feet of office and building space, along with about 15 acres of land that can be ground for more office space in the future.

All spheres of Google’s operations are guided by its organizational culture based on challenging the status quo and adopting an unconventional approach in getting things done.

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Value chain Google

Outbound logistics Online search and integration of advertisements into

search results represents Google’s core business and there is no outbound logistics associated with running this business. Google also sells physical technological products such as Smart watches, Nexus Phones, Chrome cast, Chrome books, technological accessories and other products via its website www.store.google.com. In 2015 Google also opened its first fully-branded physical store in London.

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Value chain Google

Marketing and sales Google’s marketing strategy relies on integration of online

and offline communication channels to communicate the marketing message. Popular components of marketing communication mix such as advertising, events and experiences and public relations are used by Google extensively, whereas the company uses sales promotions and direct marketing sparingly. Google sales are predominantly conducted via online sales channel and the company started to utilize traditional offline sales channel only recently.

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Value chain Google

Service Google forums play an instrumental role in terms of

assisting customers to deal with a wide range of technical and other issues. Interestingly, as of May 2015, attempts to find Google’s customer services phone numbers have proved to be unsuccessful. This must be due to cost considerations taking into account hundreds of millions of Google customers around the globe.

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Value chain Google

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THANK YoU!!!

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