ichael Porter's Value Chain Management
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In competitive industries, most of the time, companies must look within and find ways to reduce the cost of bringing a product from the raw material to finished stage to remain competitive in the long run.
The computer microchip industry, in particular, is very competitive. Whenever a new microchip comes into the marketplace, the makers of clone microchips release a clone microchip that is almost as good as the original but priced considerably lower.
Consider the following scenario:
The Smart Chips Company specializes in developing first-of-its-kind microchips; yet, its market share has been hurt by clone microchips. Research the concept of Michael Porter's Value Chain Management.
Respond to the following:
How you would put this concept to work, specifically at the Smart Chips Company, to help it remain competitive in the long run?
What other management concept(s) covered in this course would be helpful to Smart Chips? How would you incorporate them into the Smart Chip's culture?
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ichael Porter's Value Chain Management is discussed in great detail in this solution.
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The concept of value chain management of Michael Porter depicts that there is inbound logistics, operations, outbound logistics, marketing & sales, and service. These are the primary activities. The support activities are Firm Infrastructure, Human resource management, technology, and procurement. Now, the problem that Smart Chips is facing is that clones are being developed and sold at very low costs leading to decline in margins(Porter. M, 1998), .
There are several actions that Smart Chips could take to improve its position. The objective of Smart Chips should be to create as long a lag as possible between the launch of its product and the emergence of clones. In this ...
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