Reference no: EM133055289

Response to below discussion

In the simulation, the company will need to do a value chain analysis to assist them in helping them adjust their value chain model to fit the company's strategy. In the case of my company, we are utilizing the a low cost advantage approach. Our strategy focuses on price sensitive products. We ensure we continue to meet the needs of the customer while ensuring we keep our costs low. Much of our products for the low cost approach have our prices for our products generally lower than our competitors. Using the value chain concept is to increase efficiency so the business can reach the most value for the least possible cost. Our price for value will allow us to access customers that are sensitive to price while still making the product attractive enough for customers that want value. "Value chain represents the internal activities a firm engages in when transforming inputs into outputs." (Jurevicius, 2021). When you conduct the analysis of the company, you can break down your processes into primary and support activities. The primary activities are inbound logistics, operations, outbound logistics, marketing and sales, and service. The supporting activities are Firm infrastructure, human resource management, procurement, and technology. It's important to identify what activities your company deals with falls into each of these categories so you can begin the analysis to lower costs. You are able to identify the cost drivers and look for opportunities to reduce costs. "Competitive scope can have a powerful effect on the competitive advantage, because it shapes the configuration and economics of the value chain." (Porter, 2001, pg 62). Porter identified there were four different scopes that would shape the value chain, segment scope, vertical scope, geographic scope, and industry scope. Included in each of these scopes is the broad scope, which focuses on more activities internally, and narrow scope, which focuses on particular segments, geographic, or industry to achieve a lower cost. It is important to conduct an analysis of your company's value chain so you can identify the correct scope that aligns with your strategy. With this simulation, our company would focus on a segment scope and a broad scope to ensure we can lower costs across all our products. Segment scope normally favors narrow scope, but our products have shared markets and also have shared value chain segments, making it appropriate for the company to utilize a broad scope focus with segment scope.