Understanding how your company creates value, and looking for ways to add more value, are critical elements in developing a competitive strategy. In addition to all of the proprietary analysis in the. What if nike built some of their own software to meet their specific business requirements. Nike has a global procurement team to manage the procurement part of its supply chain management.
Divya mishra school of management purdue university calumet submitted to. Manufacturing, logistics, supply chain and 27 some service orientated organizations. Nike manufacturing and supply chain strategies market. The athletic footwear market incorporates sportswear, trekking shoes, aerobics shoes, walking shoes, and. The value chain analysis describes the activities the organi. Strategic analysis nike was swot analysis and value chain. Analisis valuechain berfokus pada total value chain dari suatu produk, mulai dari desain produk, sampai dengan pemanufakturan produk bahkan jasa setelah penjualan. The value chain from competitive advantage, by michael. Value added selling price less the cost of purchased raw materials has sometimes been used as the focal point for cost analysis because it was viewed as the area in which a firm can control costs. Analysis begins with part of a total value stream, that part of the value stream has customers too.
Conditions in the sports equipment industry and available resources term paper business economics operations research publish your bachelors or masters thesis, dissertation, term paper or. Overall demand trends have been favorable in most regions, for both athletic footwear and apparel. The aim of this strategy is to reduce costs throughout the value chain and. The term value chain reflects the fact that, as each step of this path is completed, the product becomes more valuable than it was at the previous step table 4. Value chain michael porter was the first person who introduced the term value chain in his book competitive advantage. Michael porter defines value chain as a representation of a firms valueadding activities, based on its pricing strategy and cost structure. The information and secondary research from adidas, nike and under armour was collected from published books, journal articles, reports. Price book value is a widely used stock evaluation measure.
Another important decision may be transportation planning. An analysis of the value chain rather than value added is the appropriate way to examine competitive advantage. Sustainability has become a big concern in terms of the unethical supply chain strategy. The value chain enables the analysis of big data technologies for each step within the chain. In this article well examine examples of how you can perform a firm level value chain analysis.
Generally, amazon does not have longterm contracts or arrangements with its vendors to guarantee the. Pdf h ere is a fivestep method for discovering a customers particular strategic needs based on a. The value chain model developed by porter is extended to a steel manufacturing sector due to expansions of steel plants has become a continual process for their growth and survival. A value chain represents the industrial process starts from raw materialsinputs to end productsservices. It is a means of implementing competitive strategies. Geographically, we look for strong demand from north america and china. Activities that maintain and enhance a products value, such as. Each step in the manufacture of a product or the delivery of a service can be thought of as a link in a chain that adds value to the product or service. Pdf using valuechain analysis to discover customers strategic. The term value chain refers to the process in which businesses receive raw. Strategic value chain analysis analisi stratejik rantai. Nike aims to be a brand with purpose that moves the world forward.
After reading this book, the next day when i went to my gym, i noticed that majority were wearing a nike. Chain storeswhether in the food, book, or music businessthat customize their inventories to match regional or even neighborhood tastes serve this category of customer. A comparative analysis of strategies and business models of nike. The term value chain was used by michael porter in his book competitive advantage. In his book competitive advantage 1985, michael porter explains value chain analysis. The chapter explores the concept of a big data ecosystem.
Swot analysis is similar as pest analysis to understanding the corporation but swot analysis is to understanding between own corporation and competitors, to getting the information which part nike should improve to become better than other competitors. We believe nike, with close to 100% of its production outsourced to asia, has a strong competitive advantage because of its efficient and welldeveloped supply chain 1 source. Ikea valuechain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the global furniture retailer. Value chain analysis is the process of looking at the activities that go into changing the inputs for a product or service into an output that is valued by the customer. Value chain is used to analyze the flow of valueadding activities from the raw material. The value chain analysis show the business culture and business operating system which shows that apple value chain is valuable because their product assembled in china with low cost and they have their uk operating system and human resource follows the required environment as in united kingdom.
These will be based on intellectual capitalbrands, technology, new product development, new channel strategieswith operations activities largely outsourced. Athletic footwear market size, industry analysis report. Nikes management analyzes its internal environment and makes decisions based on that analysis. Nike s value chain and competitive forces in 1984, nike owned just 16% of the athleticshoe market, and for much of the 1980s it was running neckandneck with reebok wilson 1. Pdf the emergence of value chain thinking researchgate. Another adaptation of the gvc construct can be seen in the aflcios curriculum for organizers in export processing zones epzs. Because of nikes marketing research, the company has decided to revamp its apparel division to be more fashion savvy. How the organisation carries out value chain activities determines costs and profits. The american manufacturer, through its marketing strategy which rests on a favorable brand image, has evolved into a large. Athletic footwear market size was usd 80 billion in 2015 and is forecast to grow at approximately 3% cagr from 2016 to 2023. The major way we see supply chain management meeting future needs is through virtual organizations. Intels strategy in terms of the primary value chain activities. Internal and external business environment of apple. To achieve that, we need all parts of our value chain to understand and deliver on our goalsfrom our leaders to product designers, to the employees in our stores, and workers.
Value chain mapping is the process of identifying the geography and activities of stakeholders involved from taking a good or service from raw material to production and then to the consumer inputoutput. Tanzania tourism value chain study final report june 2009 in association with braeside gardens, lavington po box 43483, nairobi 00100 tel. The value chain also known as porters value chain analysis is a business management concept that was developed by michael porter. In the marketingsales process of the fmcg value chain, analyses are geared towards improving commercial performance and customer centricity fmcg value chain marketingsales marketingsales pricing strategy the analysis focuses on demand variation at different price levels with different promotionrebate offers. The primary activities within michael porters value chain are used to provide a company with a competitive advantage in any one of the five activities so it has an advantage in the industry in. The drivers of the good results include basketball, lifestyle running, and men and womens apparel. The big data value chain is introduced to describe the information flow within a big data system as a series of steps needed to generate value and useful insights from data. Fifteen years ago, nike underwent arguably more intense scrutiny and brutal attacks for its global supply chain management policies and priorities. Sports equipment and accessories market segmentation. Pdf using valuechain analysis to discover customers. The value chain can provide the basis for a strategic analysis in terms of the identification of an competitive advantage. Mapping of suppliers and service providers involved in the zanzibar beach. Perhaps part of the problem with manufacturers digitizing the entire value chain lies in the reliance on technology that was not developed specifically for their needs.
A comparative analysis of adidas, nike and under armour. The value chain the term value chain was used by michael porter. Value chain analysis is mentioned extensively in the first half of the book competitive advantage in 1985 by michael porter. In terms of the value chain concept, intel has reaped tangible benefits in the volume of business it does on the web, as well as created savings of time and money for both itself and its customers. Value chain analysis for assessing competitive advantage. In this paper a value chain model for steel manufacturing sector is developed considering five primary. The value chain as a strategicanalysis tool emerged when nike set a precedent in the. The current controversy over supply chain practices of global corporations such as disney, walmart and sears in bangladesh reminded me of nikes past and its subsequent corporate sustainability evolution. Indeed, companies such as nike and the gap do very little of their own. Value chain analysis a value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market. If its your first time performing this type of analysis, this. Sports equipment and accessories market industry overview. Value chain analysis provides key inputs on the role of stakeholders involved at various stages of the value chain. Porter suggested that activities within an organisation add value to the service and products that the organisation produces, and all these activities should be run at optimum level if the organisation is to gain any real.
Swot analysis of the key market players highlights their strengths and weaknesses along with potential opportunities present in the market. The figure below illustrates the essence of amazon value chain analysis. Porters value chain analysis by michael porter toolshero. A value chain charts the path by which products and services are created and eventually sold to customers porter, 1985. Michael porter discussed this in his influential 1985 book competitive advantage, in which he first introduced the concept of the value chain. Pdf on jan 1, 2017, pairach piboonrungroj and others published the. Creating and sustaining superior performance porter 1985. This makes nikes financial resources one of its core competencies. The companys goal is to become a 100% ebusiness enabled corporation. An activity ratio calculated as cost of goods sold divided by inventory. Using value chain analysis to discover customers strategic needs article pdf available in strategy and leadership 364 july 2008 with 7,563 reads how we measure reads.
Value chain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the business. Studies that use the gvc framework typically follow a research approach that involves two main steps. Introduction it was introduced by michael porter in 1985, in criticism of his 5 force model. Value chain analysis value chain analysis is a systematic way of examining all the value ystematic organizations functional activities and how well. The value chain was first introduced by michael porter during the 1980s in his bestselling book, competitive advantage. Destination analysis and tourism product description 50 3. The value chain is the chain of activities by which a good or. Now, with somewhere between 4347% of that market, nike is the undisputed leader. Valuechain analysis looks at every step a business goes through, from raw materials to the eventual enduser. Value chain for nike the decision that would be made for the inbound logistics may include what level of inventory to hold.