INTRODUTION TO MIS

SUBMITTED BY: NAME: AROOJ FATIMA

ROLL NO: 21:F1:136 SEMESTER : 4th
SESSEION: ADP (IT)

May 27, 2023

Question 1
According to Michael Porter's Five Forces model, there are several factors that the management
of an auto manufacturing company can concentrate on to enhance their business and gain a
greater market share compared to their competitors. These factors include:
1. Competitive Rivalry: The management should assess the level of competition in the auto
manufacturing industry. They can concentrate on differentiating their products or services
to create a unique selling proposition and gain a competitive advantage. This can be
achieved through innovation, design, quality, pricing strategies, or customer service.
2. Supplier Power: Auto manufacturers heavily rely on suppliers for various components
and materials. The management should evaluate their supplier relationships and negotiate
favorable terms to reduce costs and ensure a reliable supply chain. Diversifying the
supplier base or vertically integrating certain components can also enhance their
bargaining power.
3. Buyer Power: Understanding the needs and preferences of customers is crucial for auto
manufacturers. The management should focus on building strong customer relationships
and providing value-added services. Offering customization options, flexible financing,
warranties, or after-sales services can help increase customer loyalty and reduce the
power of buyers.
4. Threat of New Entrants: The management should assess the barriers to entry in the auto
manufacturing industry. They can concentrate on strengthening their brand reputation,
developing proprietary technologies, and investing in research and development.
Additionally, economies of scale and cost advantages can act as barriers to entry, making
it difficult for new competitors to enter the market.
5. Threat of Substitutes: Auto manufacturers should consider potential substitutes for their
products, such as public transportation, ride-sharing services, or alternative modes of
transportation. The management can concentrate on improving fuel efficiency,
developing electric or autonomous vehicles, or exploring new mobility solutions to
reduce the threat of substitutes.
By analyzing and addressing these five forces, the management of the auto manufacturing
company can develop strategies to enhance their business and gain a larger market share
compared to their competitors. It is important to conduct a thorough analysis of the industry
dynamics and adapt the strategies accordingly to achieve long-term success.

Question 2
A Value Chain is the series of activities that a business completes to create and bring a product or
service to its customers. Simply, it’s what a business must do to deliver value. The Value Chain
can encompass a wide range of activities involved in the creation of a product or service,
including research and development, production, marketing and sales, and customer service.
Each activity in the Value Chain makes the product or service more appealing to the customer,
with the business’s goal to optimize the value added throughout the process to achieve a
competitive advantage in the marketplace. Because the Value Chain plays such a vital role in a
company’s success, businesses should undertake deep dives into their operational processes.
During a Value Chain analysis, the company identifies and analyzes the activities involved in
creating a product or service. The goal is to make an evaluation of how these activities contribute
to overall value creation. This analysis helps businesses identify areas where they can improve
efficiency and reduce costs, as well as opportunities to innovate and differentiate themselves
from competitors. Of course, the goal of a Value Chain analysis is to create a competitive
advantage and increase profitability.

Overview Of Porter’s Value Chain Model Primary & Supporting

Activities
The Value Chain Model focuses an analysis of the activities within a company’s operations on
how they create value and contribute to its competitive advantage in the marketplace. Within this
framework, a company’s Value Chain is comprised of two main types of activities: primary
activities and support activities. Primary activities are directly involved in the production and
delivery of a product or service to the customer. Experts typically agree that there are five
primary activities:
 Inbound logistics
 Operations
 Outbound logistics
 Marketing and sales
 Service
As you can see, primary activities are each directly involved with the products or services a
company offers, usually with direct contact with materials that become what the company sells.
We’ll discuss each of these more in a moment. Support activities are those that support the
primary activities and help to optimize their performance. We’ll also discuss these more in a
moment. There are four support activities:
 Procurement
 Technology development
 Human resource management
 Infrastructure
By analyzing each of these activities, businesses can identify opportunities to improve their
operations and reduce costs. For example, by optimizing procurement, a company can reduce the
cost of raw materials. By improving operations, a company can increase the efficiency of the
production process. Through understanding the Value Chain, businesses identify their core
competencies and competitive advantages; they find ways to improve and leverage those
advantages to increase profitability and market share.
Porter’s Value Chain Primary Activities
Primary Activities deal directly with the products and services a company markets.

Inbound Logistics:
Process for inbound Movements such as receiving, warehousing, and managing materials, parts
and other inventory.

Production/Operations:
Processes that convert raw materials, labor, or energy into finished goods or products

Outbound Logistics:
Processes that pertain to the storage and movement of the completed product to the customer.

Marketing & Sales:

Processes relating to the advertising, promotions, and pricing of the products to optimize the
return on investment.

Customer Service:
Processes that are offered after the product has been sold and delivered, such as customer service
and support, maintenance, repairs, and funds.

Porter’s Value Chain Supporting Activities

Supporting Activities facilitates a company’s efforts to deliver its main products and services to
its customers.

Firm Infrastructure:
Company’s Support System and the functions that allow it to maintain operations including all
legal, administrative, and accounting.

Human Resources:
Hiring and retaining employees who fulfill business strategy, as well as help design, market, and
sell the product, involves the process of delivering the final product.

Technology:
Research and development help designing the product and improving the automating of the
process, for example, a business working towards to reduce the inventory and labor waste by
implementing RFID technology in the warehouse to improve overall stock accuracy and
minimize labor tasks.
Procurement:
Processes of acquisition of inputs, raw materials, or resources for the firm, this relates heavily to
inbound logistics where a company is looking for resale the goods they procure, for example in
the case of an ecommerce business.

How Do You Use Porter’s Value Chain Model? Step-By-Step

As you’ll see from the step-by-step description that follows, putting the Value Chain Model into
motion requires a lot of deep and sober thinking about how your company spends its time and
other resources.

Step 1: Identify sub activities for each Primary Activity

No activity is accomplished without a series of steps to make it possible. Once you’ve identified
your Primary Activities as described by the framework, investigate each one to unpack the
smaller sub activities that make it possible.

Step 2: Identify sub activities for each Supporting Activity

As in Step 1, Step 2 asks you to breakdown sub activities, this time for each Supporting Activity.

Step 3: Identify Connections between Activities

Once you have identified the primary and support activities, and all the myriad sub activities that
make them possible, analyze each activity to determine how it contributes to the value creation
process. This involves examining the costs associated with each activity and how it affects the
final product or service.

Step 4: Identify Hidden Opportunities to Increase Value

After analyzing each activity, identify areas where improvements can be made to increase
efficiency or reduce costs. For example, the business may be able to streamline its procurement
process or invest in new technology to improve operations.
Some of these opportunities may be obvious once you start looking but be ready to think outside
the box to find those “hidden” opportunities to deliver value better.

Step 5: Implement Changes

The final step is to implement the changes identified in Step Four. This may involve restructuring
the business, investing in new technology, or hiring additional staff with different skills. Going
forward, be sure to measure the effectiveness of these changes to ensure they achieve the desired
results.

Value Chain Model Example: Starbucks

Starbucks, the global coffeehouse chain, uses the Value Chain Model to create value for its
customers in several ways. Let’s consider the company’s five primary activities:
  Inbound Logistics: Starbucks sources high-quality coffee beans from around the
world and transports them to its roasting facilities. The company also purchases other raw
materials, such as milk and syrups, to be used in its beverages. Focusing on quality
allows them to charge higher prices and sell the experience of visiting one of their stores.

 Operations: At its roasting facilities, Starbucks roasts and packages the coffee beans
into various blends and flavors. In its stores, the company prepares beverages and food
items, trains employees, and maintains equipment and facilities. These centralized
facilities allow for economies of scale without sacrificing quality.

 Outbound Logistics: Starbucks distributes its packaged coffee and merchandise

products to its retail stores and other distribution channels. The company also uses a
network of suppliers and distribution centers to supply its stores with raw materials and
other products.

 Marketing and Sales: Starbucks is an excellent example of brand development

utilizing marketing efforts, including advertising, social media, and in-store promotions.
Their stores are designed to provide a unique and comfortable environment for
customers. Employees are trained in providing a particular customer service experience.

 Service: Starbucks places a strong emphasis on providing high-quality customer

service, including personalized interactions and customized beverage options. A loyalty
program, mobile ordering, and other services enhance the customer experience.
Starbucks has taken steps to improve efficiency, reduce costs, and create more value for its
customers, like investing in sustainability initiatives to improve its inbound logistics and reduce
its environmental impact. Recently, Starbucks has been maneuvering through fraught relations
with its labor force. The company will need to decide how their reputation and corporate image
contribute to their primary activities and how they respond to calls for labor force unionization
affects them.