Research Proposal on "Value Chain Analysis"

Research Proposal 4 pages (1212 words) Sources: 2 Style: APA

[EXCERPT] . . . .

Value Chain Analysis

Wal-Mart derives value throughout its value chain. Among primary activities, Wal-Mart derives substantial value from its inbound logistics. The company's two-tiered network of distribution centers allows for relatively full truckloads to be delivered. At their distribution centers, they are able to transfer goods directly from one truck to another, eliminating the need to hold those goods in inventory. In the early 90s, this advantage was giving them a COGS for inbound logistics of 3.7%, versus 4.8% for their competitors.

Wal-Mart also derives value from marketing. The company has eliminated sales promotions, which allows them lower everyday costs. In purchasing, they use their buying power to leverage their suppliers into better costs. Moreover, their buyers operate in a direct, matter-of-fact manner, without forging strong relationships that could compromise their focus on enhancing value. Additionally, Wal-Mart's purchasing is centralized at their Arkansas headquarters, to ensure consistency and to maximize opportunities for volume discounts.

Some of the key support activities that drive value for Wal-Mart are their store layout, which puts inventories in just 10% of floor space, versus an industry average of 25%, resulting in $300/ft2 sales, much higher than their competitors. The company also makes hiring a priority, ensuring that new hires are not only well-suited but also well-indoctrinated into the corporate culture of cost reduction. Furthermore, the company has been at the fore of utilizing it systems, including satellites, to manage inventory and derive further value.

Target operates similar stores, but finding value in similar ways, such as the use of regional distribution centers (they have twenty-six, along with five import centers), but with some key points of differentiation. In purchasing, Target seeks value in offering higher quality merchandise, the choices of which are driven by market research. This has led them to sign exclusive deals with many famous apparel lines. Marketing has also driven value in Target in other ways. They have been an innovator in gift cards, which fuel incremental sales, and have derived value for their online shopping site. Moreover, their focus on brands and higher end shopping experience has allowed them maintain stable margins.

Target has also sought to derive value through its support functions. The company has set up a major support operation in Bangalore, India, in an effort to reduce support costs. Target also seeks value through its finance function. Unlike Wal-Mart, Target operates a finance division. This typically accounts for between 2.3-2.9% of gross revenues.

Research and development continues to be a value driver for Target as well. They use R&D to enhance product offerings, information technology and distribution, such as with their new perishable food distribution centers.

In recent years, Sears has taken a different approach to its value chain. The company completely re-engineered its management style and business philosophy around a model termed "employee-customer-profit." This shifted the emphasis of the value chain from purchasing, distribution and marketing to human resources.

This philosophy came about after years of losses, and was used to turn the company around. It enters the value chain through hiring, training and employee communication. Employees are focused on their role within the organization, and are shown the value of that role. In turn, this training function results in greater customer satisfaction and ultimately higher sales.

Other key components of the Sears/K-Mart value chain are in marketing, particularly a strong branding campaign; purchasing, focused on upgrading the quality of the merchandise; and on support operations, where improved efficiency has driven profits in recent years.

Costco has been able to grow rapidly due to the strength of their value chain. As with most major retailers, Costco derives significant value from its purchasing function.… READ MORE

How to Reference "Value Chain Analysis" Research Proposal in a Bibliography

Related Research Proposals:

Industry Analysis on the Personal Computer Industry the Supply Conditions Research Paper

Industry Analysis on the Personal Computer Industry

Personal Computer Industry

Industry Analysis on the Personal Computer Industry: Supply Conditions

Supply is one of the essential factors in the maximization of… read more

Research Paper 6 pages (1731 words) Sources: 6 Topic: Business / Corporations / E-commerce

---

Innovation and Value Chains: Implications for Information Term Paper

Innovation and Value Chains: Implications for Information Technologies

The reliance on innovation and continual technological advances are the catalyst of economic growth in the high technology, information technologies (it) and… read more

Term Paper 2 pages (582 words) Sources: 2 Topic: Business / Corporations / E-commerce

---

Hewlett Packard Term Paper

HP Value Chain Analysis

To a casual observer, the importance of informational technology to a computer company like Hewlett Packard may seem obvious. After all, the company is based upon… read more

Term Paper 2 pages (828 words) Sources: 1+ Topic: Business / Corporations / E-commerce

---

Economic Social Ethical and Environmental Sustainability Thesis

Chocolate Value Chain

Analyzing the Chocolate Industry Value Chain

The chocolate industry value chain is one of the most global in scope, encompassing the growing and harvesting of cocoa beans… read more

Thesis 15 pages (4765 words) Sources: 1+ Topic: Business / Corporations / E-commerce

---

Organization Value Chain Term Paper

Corporate it and the Value Chain

An organization Value Chain

Corporate information technology (it) is a term that encompasses all forms of technology used to create, store, exchange, and use… read more

Term Paper 4 pages (1073 words) Sources: 1+ Topic: Business / Corporations / E-commerce

---

View 100+ more related papers  >>