Value Delivery Network
A value delivery network allows many companies to create customer value that cannot be created by use of the company’s own value chain. A “Value delivery network,” is made up of the company, suppliers, distributors, and ultimately the customers who partner with each other to improve the performance of the entire system (Armstrong et al. 52). This type of system interests me because I have always been curious as to what path a product or service must take in order to be considered a “value” to a customer. Generating my interest during one of the case studies during class, Accenture is a company that has improved the value delivery network for many companies. Accenture has improved not only the value delivery system for the airline industry, but its own global delivery system with its partner BT.
Accenture found the need to introduce e-commerce to the airline industry's line of services to its customers. E-commerce, as Accenture puts it; reduces costs, maximizes information about customers, allows targeting certain distribution channels, differentiates products, establishes long term relationships, and creates lifetime loyalty; all of which creates value in the delivery network (Stewart). E-commerce allows the airline industry to connect to its customers directly and with third party electronic channels that provide value to customers in ways unknown in the traditional distribution cycle (Stewart). As a consulting firm, Accenture not only improved the value delivery network for the airline industry, but for its partner BT.
Signing a 10-year, $575M outsourcing contract w/ BT, Accenture has essentially expanded its geographic reach of services provided to BT within the global market. Services provided under the new contract include customer contact/call center, recruitment, pension administration, payroll and benefits administration, performance management administration, health and safety, and HR advisory and information services. By outsourcing most of its services to Accenture, BT improves its value delivery network by providing lower costs and higher quality services to its customers. As stated by BT's Alex Wilson, "Accenture HR Services has a proven track record of consistently high quality service and a true partnership approach. These were key factors in its selection, along with its unmatched ability to deliver HR services on a global basis. This agreement will allow our staff to concentrate even more on the strategic role of HR management to our growing global business." Just as Honda has outsourced all of its automobile mirror operations to Donnelly Corporation benefiting both companies in terms of increased performance and passing the value on to its customers (Armstrong et al.
In a high competitive world market and with the increasing rational buyers a company can only win by creating and delivering the best customer value than the others competitors do. To succeed, a company needs to use the concepts of value chain.
There Are more people in the world locked up here, in the land of the free, in the 1970 we became an era in which has been defined as this term, "Mass Incarceration", The United States now has the highest rates of incarceration in the world, and today we have a prison population of 2.3.
The United States hold 5% of the world population but holds 40% of the world’ incarcerate. (Understanding Mass Incarceration). African American males ages 20-34 with education less than High School since the 1980s the incarceration rate increase 52.7% to 61.8% in 2008. In the duration of 28 years there has been an increase of 9.1. African American males age 20-40 without a high school diplomas have the highest incarceration rate due to prejudice.
Soman,D & Marand, S (2009). Managing Customer Value: One Stage at a Time.: World Scientific Publishing. p9-14.
Mass incarceration is the essential approach target of detainment. The United States imprisons more of its people than any nation on Earth, and by a considerable margin. Criminals attract little empathy and have no political capital. Many consequential factors are present when correlated with mass incarceration. Families are torn because of the incarceration of a loved one. Upon, examination the intergenerational consequences, economic effect, socio-economic status of African-American men and women, advancement of the technological incarceration and rehabilitation are dilemmas that are not brought up as much in mass media.
IT governance in the airline industry is specifically tied to sales and value chain management. By the late 1990s, international travel software traditionally used by travel agencies, such as SABRE, was opened up via application programming interface (API) to web developers (Nicolaou & Schick, 2011). As a result, consumers saw the advent of internet-based travel agencies, and many airlines and other travel companies began to sell directly to passengers (Buhalisa & Licata, 2002).
The era of mass incarceration began four decades ago, marking the greatest count of prisoners held in U.S. jails and prisons. When speaking of mass incarceration, more than acknowledging the numbers, the significance lies within the statistics of who the cities, states, and government are imprisoning. Out of the whopping two million people who are confined, more than 70 percent of prisoners are people of color, consistently of a poor and underprivileged background (Davis 1998: 684). Sociologists as well as psychologists’ studies bear and explain this phenomenon. The idea of social control and its relation to crime seemingly differ in groups and communities. Street crime, for instance, although is a form of formal social deviance, does not highlight
3. Fortunately, there are several opportunities in the airline industry of which companies will be able to take advantage. First, the airline industry is reviving and passenger levels are now returning to pre-9/11 status. Companies can offer high degrees of service and reduce costs through the use of the Internet, such as online ticket sales, flight seating charts, and plane infor...
Value chain model highlights specific activities where the information systems could be applied. This model is set to identify leverage points in which IS could have a strategic impact to enhance company’s competitive position. The value chain perceives firm as a series of interconnected activities that add a margin of value.
Value chains are essential elements of successful businesses, and how to gain a competitive advantage by analyzing them is the most important aspect. In Porter’s value-chain model, he points out that there are two types of business activities: primary activities, which include inbound logistics, operations, outbound logistics, marketing, sales and service; and support activities, which include procurement, technology development, human resources management, and firm infrastructure. In order to gain an edge, companies should focus on these activities to improve or create products that will satisfy their customers.
Value chain analyses a firm 's internal activities such as planning, production, and development, packaging and distribution so as to create value for clients. The function of the value chain is to identify the sources for cost reduction along with quality improvement. It means value chain is used to identify the strong and weak points, positive and negative points, the scope of improvement; in a nutshell, the advantages and disadvantages of the activities taking place in the system. The value chain is also called as a strategic analysis tool and it is a well-known concept in business management industry.
When a business aims to be as successful as possible in selling its products and services, it must examine in detail whether or not the products will be attractive and necessary; if the price is optimal; if the product is being distributed in the best locations; and finally, how interest and awareness can be created for the products. In order for a business to target all of these elements to the right people at the right time, it must employ the right type of marketing mix: Product, Price, Place and Promotion. In a dysfunctional time for the airline industry, most airlines, especially major carriers, are adapting the concept of "doing less with more." One low-cost carrier, JetBlue, is changing the domestic aviation landscape in this regard and is defying the odds. Here is a company that has examined each marketing mix elements carefully, has adapted them to its customer’s needs, and is succeeding because of this approach.
To get started, we first need to understand what Crocs' value chain is and how that process plays a role in the strategic direction of the company. The authors of our text, views the value chain as "the entire series of organizational work activities that add value at each step, from raw materials to finished product. In its entirety, the value chain can encompass supplier's suppliers to the customer's customers"(Robbins & Coulter, 2009, p.430). At Crocs, the entire series of organization work activities may be broken down even further using Porter's value chain model of viewing a manufacturing (or service) primary and secondary activities as a "system made up of subsystems, each with inputs, transformation processes and outputs"(Ifm.eng.cam.ac.uk, 2011). A diagram, compliments of Porter(1985) can be seen below:
David Neelman realized his vision of creating an airlines company that is focused on customer service by starting JetBlue. During the startup phase or entrepreneurial stage, typically most of the companies go through the activities of marketing the service and /or product. But Neelman, perceptive of the industry needs, went about raising enough capital before starting JetBlue, as airlines industry is a capital intensive industry. His entrepreneurial style and previous experience enabled him to identify the core value of the service “To improve the passenger experience at a low cost” that he wanted JetBlue to provide. Neelman wanted to utilize technology to bring better customer experience at a low cost. Some of the technological activities that JetBlue planned include state-of-the-art revenue management system, paperless tickets etc. His in-depth experience enabled him to identify the external factors that would affect the business such as simple check-in and boarding process, hassle free ticketing procedures etc. This emphasized his knowledge of adapting to the ever changing customer needs. Neelman instilled the culture of...
Explain how the company’s value-chain activities can be better linked to create value for the company.