Reference no: EM132204838

Value Chain analysis is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation. The value chain allows the insight to a firms internal activities and reveals where their competitive advantages or disadvantages are. A firm competes through differentiation advantage, which in turn would assist them to perform better in relation to their competitors.

In applying the value chain analysis to a local Bay Area clothing brand, Tres Royale. There are primary and support activities to take into consideration to determine the company’s strengths. Tres Royale is a lifestyle brand, which is a reflection of its community and artistic background. They are able to reach success in their market through reaching their targeted audience via social media marketing, partnering with local magazines and creating brand awareness directly on college campuses. They are able to leverage their economies of scale through low cost advertisement to increase product sales. Product and inventory is managed directly with the brand creators, which reduces the cost on labor to manage this function of the business. As a smaller company they are able to manage the current volume. Through their online store they distribute their product for convenient access to their consumers.

Tres Royale is able to reduce costs by offering unpaid internships to college students to conduct research and development. The idea is to continue foster fresh ideas straight from the target segment that are direct consumers of the brand. Tres Royale is able to be linked directly with their other company Cubico Media. Cubico Media provides media services for broadcasting, film and editorial. They are able to connect with and leverage investors who use media services from Cubico Media to support Tres Royale.