Friday, 16 September 2016

Industry Value Chains






by Marcus Powe, RMIT's Entrepreneur-in-Residence 



THE MISSING LINK? 


All organisations are in an Industry Value Chain (IVC). Why call it a chain? Each link in the chain represents an organisation in a market, where are you?
An easy way to remember the IVC is to think of the raw materials as a tree. At the other end of the chain is a wooden chair. All the other organisations in between are links in the chain. In this example, there would also be a timber mill, chair manufacturer and the wholesaler. You might be thinking, “How does this model developed by Professor Michael Porter, last century remain relevant?” Wow the Internet!  Strip back the terms and jargon, you still have an IVC.
http://www.linkedin.com/mpr/mpr/AAEAAQAAAAAAAAarAAAAJDY1MWVkOTAyLWZhZmItNGM3Yy05MTljLTQxNzYzODQ1NGYzMg.png


The IVC is simply a way of drawing the market that an organisation competes in. You may be asking yourself, ‘Why would I bother drawing the marketplace?” The answer is simple – by drawing the market you can see how it works, and the more you can see, the better position you will be in to compete. By drawing an IVC you achieve a greater understanding of how your industry actually works.
The first thing that you need to do is identify where your organisation fits into the chain. Then list all of your organisation’s suppliers and their suppliers to determine the upstream links in the chain. Then do the same for your customers and their customers to determine the downstream links.
It is important to realise that each link in the chain represents a mark-up or margin. Although the raw material may cost a few cents, it then has to be refined (or value added), then distributed, manufactured into a final product and then retailed. And each organisation in the link has to make a profit for them by marking up the product. Once you have determined your position in the IVC, you are then presented with several choices. You could use the information to go about an ‘integration’ strategy – (1) vertical (to acquire a competitor), (2) horizontal (to acquire a supplier or customer) or (3) parallel (to acquire an organisation for their existing distribution channels).
Why do this?
Vertical: to increase your market share, to increase your market presence or to enjoy scale economies. It can also give your organisation benefits it otherwise would not receive, such as shorter delivery times, the need to hold less stock, or ownership of a proprietary technology that you don’t want shared with your competitors. It could also lead to your organisation enjoying larger margins.
Horizontal: Achieving brand leverage by putting all products under the same brand. This would have the effect of reducing your overall marketing expenses, yet still achieve greater advertising through your common brand.

Parallel: If both companies share similar inputs, they then are put through the one supplier, giving the organisation a greater negotiating position, which could result in cheaper raw material costs.
That said, there are several downsides to the parallel integration strategy. A lack of focus for the organisation is the main one. If the acquired organisation is not a viable commercial entity, more time, effort or money will be needed to turn the organisation into a viable entity.
Who has the real power?
You are also able to use the IVC to determine who has the power. If the organisation is in a position of power, it can exercise pressure over companies located both upstream and downstream in the IVC. In exerting power, an organisation can insist on quality standards, impose delivery schedules to minimise their own inventory level, and collaborate to make sure that their innovative product/service features are rapidly introduced. This power translates often into sustainable financial and social dividends.

38 comments:

fashion world said...

Bridal Mehndi Dresses

New kurta Style said...


awesome

New kurta Style

dissertation writing service said...

A quality chain is an organization model that separates the stream of generation exercises into five classifications. Every one of these classifications is an open door for an organization to boost effectiveness and make an upper hand. The point of the worth chain is to build benefits by making esteem at each of the five item touch points so the quality surpasses the expense connected with the item.

Gloria sneek said...

quotes for valentines day
cute valentines day sayings

quotes for valentines day

tanki online said...


Thanks for sharing your info. I really appreciate your efforts and I will be waiting for your further write.
Thanks for sharing !
tanki online 2 | game 2048 online

Anonymous said...

Check My latest website on ShareIt: ShareIt for PC

Bee Homes said...

Chung cư 423 Minh Khai

Chung cư Kosmo

Vinhomes Thăng Long

Chung cư Anland Nam Cường

hoa pikey said...


The share your really gives us excitement. Thanks for your sharing. If you feel tired at work or study try to participate in our games to bring the most exciting feeling. Thank you!
hotmail sign in | red ball game | 192.168.1.1

Joseph Savage said...

RC0-N06 braindumps
RC0-N06 dumps
RC0-N06 exam
RC0-N06 questions
NSE4 braindumps
NSE4 dumps
NSE4 exam
NSE4 questions
MB2-718 braindumps
MB2-718 dumps
MB2-718 exam
MB2-718 questions
ITILFND braindumps
ITILFND dumps
ITILFND exam
ITILFND questions
C2090-600 braindumps
C2090-600 dumps
C2090-600 exam
C2090-600 questions
7230X braindumps
7230X dumps
7230X exam
7230X questions

panday kumar said...

Dangal Total Collection

Bollywood Movie Box Office

Baahubali 2 Box Office

Lenguyen Myhuong said...

Thanks for sharing, nice post!

Tìm hiểu về máy đưa võng em bé giá rẻ, hay tìm hiểu https://www.behance.net/gallery/55099531/May-dua-vong-t-dng-la-gi-nen-mua-loi-nao-tt-cho-b máy đưa võng là gì mua ở đâu uy tín hay https://mayduavongtudongblog.wordpress.com/2017/07/25/vong-dien-tu-dong-cho-em-be-la-gi-gia-bao-nhieu-tien/ võng điện cho em bé là gì

Công ty CP Dịch Vụ BĐS BeeHomes said...

https://goo.gl/5FD3YH
https://goo.gl/gy9qFH
https://goo.gl/7uEvc1
https://goo.gl/dZMHVb
https://goo.gl/xmu9A3

Way2flowers said...

Cakes to Mohali |
Cakes to Noida |
Cakes to Panchkula |
Cakes to Panipat

Way2flowers said...

Cakes to Pinjore |
Cakes to Sonipat |
Cakes to Zirakpur |
Other Cities

shevie green said...


I am very pleased that I stumbled across this in my search for something relating to this sites.
I have also bookmarked you for checking out new posts

http://kutarockcity.postbit.com/tips-cara-mengatur-pola-hidup-sehat.html/

SITUS JUDI POKER
JUDI BOLA 88
BANDAR TOGEL
POKER ONLINE TERPERCAYA
FILM BOKEP TERBARU
NONTON FILM BOKEP
PROMO BONUS MEMBER BARU

kumala sari said...


I must say you had done a tremendous job,I appreciate all your efforts.
Thanks alot for your writings.
Waiting for a new 1...Please visit our wonderful and valuable website-
For More Details Visit are Official Websites :
AGEN BOLA ONLINE

sheila waltz said...

Salam Jp
buat yang belum bergabung tunggu apa lagi
Togelhok88 Bandar judi online togel terpercaya, Tempat betting aman


PIN BBM : D8877D3C
WA : 0812227543466
"TOGEL/PASARAN"
> 4D = 69%
> 3D = 60%
> 2D = 29%
> Bonus Referal 1%
> Cash Back 5% UP 20% ( KHUSUS LIVEGAME )
> Bonus kebalikan 2D X2


TOGEL ONLINE SINGAPORE

Richard Majece said...

If you want to be real expert and know everything about market, I'm sure that you should get an education at first. https://pro-academic-writers.com/blog/cheat-in-exams will help you to pass exams.

Anonymous said...

Thank you for this great post! It has long been incredibly beneficial. I wish which you will carry on posting your information with us. @ Orthopedic Doctors in Visakhapatnam

Sofiajones said...

"It means demonstrating we are in the center of Uefa and Western european football, alternatively than happening about how precisely special were.
FIFA World Cup 2018 Opening Ceremony Date
FIFA World Cup 2018 Theme Song

Rohul Amin said...

bangla sms for girlfriend
bangla emotional sms
love sms for girlfriend bangla
emotional sms for girlfriend in bangla
bangla love sms for girlfriend
bangla girlfriend sms
bangla romantic sms for girlfriend
bangla love sms for husband
bangla love sms for wife

Anonymous said...

Kha Tran danang private car

Anonymous said...

Thank you for posting such a great article! I found your website perfect for my needs
Book Your Train

Sophie Grace said...

Thank you for this great post! It has long been incredibly beneficial. I wish which you will carry on posting your information with us. html color codes

2 player games said...

It’s great because of the knowledge you share with us, I will always follow your blog and will share your blog with my friends

angelina.ajah said...
This comment has been removed by the author.
angelina.ajah said...

agen judi

angelina.ajah said...

agen judi
agen judi online
agen sbobet

angelina.ajah said...

agen judi sbobet

angelina.ajah said...

agen judi
agen judi online
agen sbobet
agen judi sbobet
poker online
agen judi poker
judi bola
agen bola
bandar bola
bandar bola online
situs bola online
agen ibcbet
agen maxbet
agen judi ibcbet
agen judi maxbet
taruhan bola
bursa taruhan bola

angelina.ajah said...

agen judi
agen judi online
agen sbobet
agen judi sbobet
poker online
agen judi poker
judi bola
agen bola
bandar bola
bandar bola online
situs bola online
agen ibcbet
agen maxbet
agen judi ibcbet
agen judi maxbet
taruhan bola
bursa taruhan bola

angelina.ajah said...

agen judi
agen judi online
agen sbobet
agen judi sbobet
poker online
agen judi poker
judi bola
agen bola
bandar bola
bandar bola online
situs bola online
agen ibcbet
agen maxbet
agen judi ibcbet
agen judi maxbet
taruhan bola
bursa taruhan bola

angelina.ajah said...

judi sbobet online
judi sbobet
judi sbobet bola
judi sbobet casino
judi sbobet live
agen sbobet
agen sbobet bola
agen sbobet casino
agen sbobet live
bandar sbobet
bandar sbobet bola
bandar sbobet live
bandar sbobet casino
taruhan sbobet
taruhan sbobet bola
taruhan sbobet live
taruhan sbobet casino
bandar sbobet
bandar sbobet bola
bandar sbobet live
bandar sbobet casino
situs sbobet
situs sbobet bola
situs sbobet live
situs sbobet casino
poker online
agen casino
judi online terpercaya

angelina.ajah said...

judi maxbet online
judi maxbet
judi maxbet bola
judi maxbet casino
judi maxbet live
agen maxbet
agen maxbet bola
agen maxbet casino
agen maxbet live
bandar maxbet
bandar maxbet bola
bandar maxbet live
bandar maxbet casino
taruhan maxbet
taruhan maxbet bola
taruhan maxbet live
taruhan maxbet casino
bandar maxbet
bandar maxbet bola
bandar maxbet live
bandar maxbet casino
situs maxbet
situs maxbet bola
situs maxbet live
situs maxbet casino
poker online
agen casino
judi online terpercaya

angelina.ajah said...

judi bola
judi bola sbobet
judi bola ibcbet
judi bola maxbet
judi bola online
taruhan bola
taruhan bola sbobet
taruhan bola ibcbet
taruhan bola maxbet
taruhan bola online
agen bola
agen bola sbobet
agen bola ibcbet
agen bola maxbet
agen bola online
bandar bola
bandar bola sbobet
bandar bola ibcbet
bandar bola maxbet
bandar bola online
situs bola
situs bola sbobet
situs bola ibcbet
situs bola maxbet
situs bola online

angelina.ajah said...

agen casino
bandar casino
taruhan casino
casino online
situs casino
agen casino online
bandar casino online
taruhan casino online
judi online casino
situs judi casino
agen casino poker
bandar casino poker
taruhan casino poker
poker casino online
situs poker casino

Alex daina said...

Progressions in innovation have made life a great deal less demanding for every single one of us. This is valid for all parts of our lives, even in the region of our funds.Check Cashing Spring-Valley

Examresults said...
This comment has been removed by the author.