In the current time, globalization, changed attitude of customers, tight competition and complex/dynamic business environment etc are the major factors that forcing the today’s companies and institutions to adopt value chain concepts, principles and standards within their business process and strategies in order to become more productivity and successful in the market. Moreover, the use of value chain within the organization is essential for all the types of business firms or organization not only to overcome business challenges but also improve profit level, gain competitive advantages and optimizing of business activities effectively. In the same way, value chain allows the organizations to attain their long term goals and objectives on the predetermined time period (Ang, 2014). Hence, value chain is a source of competitive advantages for the today’s organizations for the overall success and growth. In the context of this research paper, the significance and concepts related to the value chain would be discussed and analyzed. Furthermore, the between the value chain of Tinto Group and CQU would be analyzed to aattain the key objectives of the study. Hence, all these are the key and fundamental goals and objectives associated with this research paper that would be achieved during the study of this paper.
Basically, a value chain or value chain analysis can be defined as one of the most valuable, innovative, and dynamic strategy/tool that helps a company or firm to access its internal activities. Moreover, the key goal of value chain is to address the most valuable activities of the firm that could produce competitive advantages to the company in the market. At the same time, it is also analyzed that, value chain is used as specific process by which companies or firms try to address and identify their support and primary activities for the purpose to add value to the final products. In this way, value chain is primarily used to increase profit level, reduce overhead costs and enhance differentiations (Willcocks, & Cullen, 2013).
On the other hand, value chain is also reflect the source of competitive advantages and helps the firms in optimizing their resources effectively. Furthermore, value chain is plays a key role in producing of competitive scope to the companies over the competitors in the market. Moreover, it is also found that, value chain is a used a strategic planning tool in order to generate the value for their key stakeholders. For example, this value chain reflects that how all the internal activities and functions of the organizations works together to generate value for the customers (Bischoff, 2013). Additionally, the value chain analysis is consists with both primary and support activities. For instance, value chain presents full range of activities (such as: production, marketing, design, distribution) and company go through these to bring a new product/services (Wisma, 2007).
Along with this, it should also be noted down that, value chain is more important and significant for the companies or firms to attain the competitive advantages reduce costs and increase profitability. Moreover, value chain is provides a lot of tangible and intangible benefits to the companies. With the help of value chain, business firms are able to generate specific business opportunities and such can be utilized to make profit for the long time. In addition, value chain is also helps the organization and guide them how to attain competitive scope to survive in the complicated business situation. Value chain is also important to create the value for the customers and utilizing available resources. On the other hand, value chain is improves organizational abilities to produce and provide more quality and innovative products at the lower costs to their customers (Crain, & Abraham, 2008).
Additionally, it also allows the companies to effectively understand the perceptions, views and attitude of their customers and developing produces as per customer needs and wants. This help generating the revenue and profit for a long time period. In addition, through the value chain, a company can also develop a much better brand image and can response to the market threats or opportunities in an effective and proper manner. Furthermore, it is also important tool to develop long term relations with their key stakeholders (Hahn, 2015). For case, a company can make true and strong commitments with their customer about offering of quality product at the low costs. In the same way, the company could motivate and encourage their customers for the company’s product and service. Finally, it can be concluded that, value chain is an important tools for the business firms to deal with the business challenges, overcome the issues, enhance profit, revenue, sales, and generate competitive advantages and organizational image (Hitt, Ireland, & Hoskisson, 2006).
Rio Tinto is one of the leading, profitable, globalized and fastest rising Australian-British multinational corporations that serve their customers at the global level. It was established in the 1873, and now the company has global business operations in the different countries such as Australia and Canada. Moreover, it is a mining and metals group company that mainly focus on finding, mining, processing and marketing the earth’s mineral resources. In addition to this, to gain the competitive scope over the competitors, the company had adopted value chain analysis model (Rio Tinto Group. 2017). This is also helped it in overcoming various costs and improving organizational profitability, reputation, marketability, and share market. Moreover, the company had divided its business activities in the primary and support activities to gain competitive advantages. The following given below chart indicates the value chain process used by the company (Wilken & Sinclair, 2009).
Primary Activities: the company mainly focuses on facilitating the collection for inbound movements of minerals, irons ore, silver, metallurgical coal from mining site to the manufacturing units. In addition to this, it is analyzed that, the business functions as well as operations of Rio Tinto Group are concerted on controlling/administrating the process, by which raw material as input are converted into the finished goods such as output (Hahn, 2015).
Supportive activities: The support activities of the company deals with procuring of raw material (silver extracts, diamonds, iron, metallurgical coal). And these are managed by the company from the mining sites to the manufacturing unit of the company where the equipments, machineries, and plants of the company are located. Moreover, the scientific component in partnership with the manufacturing unit is troubled with pertaining the equipments (hardware, software and technological knowledge) which is introduced by the company in converting those inputs into finished goods. Additionally, the company is well supported by the various activities including finance, and accounting controlling the public relation and quality (Daft, 2015).
Hence, the concepts of value chain helped the company in maintaining the leading position in the industry which is one of the most valuable tools for conducting strategic planning. At the same time, the company is also implements the theory and principals of value chain to its entire supply chin and distribution networks (Huang, 2013).
CQU is known one of the best, largest, and fast growing universities in Australia that offer a wide range of educational programs to their national and global students. In addition to this, it is found that, it is a dual sector university that is based on Queensland. Moreover, the main campus of the university is in the North Rockhampton, Queensland, Australia (CQU 2017). Additionally, it is also important to know that, tight competition among the different local and national universities in Australia had forced CQU to adopt the concepts, principles and standards of value chain analysis model to survive and compete in the educational sector. For example, the university had adopted value chain model as a strategic planning tool to generate future opportunities and overcome the various challenges. The following diagram indicates the primary and support activities of the CQU (Wisma, 2007).
The above given chart indicates that the main support activities of the CQU includes infrastructure of university, student services, administrative, academic staff support and intermediate activities (divisional management). All these support activities plays a key role in supporting the primary functions of the university including academic recruitment, student recruitment, managing research, career placement etc. It means support and primary activities are helping the university to generate value for their students and staff through optimization of resources (Weele, 2009). In addition, this diagram is also indicates that how the CQU is creating and gaining competitive advantages over the other universities in this education sector. On the other hand, the university is also taking cost advantages, competitive advantages and differentiation advantages. In addition to this, this model is also allowed the CQU to access and analyze the activities of their competitors in the industry (Fumasoli, Gornitzka, & Maassen, 2014). For case, the university had improved its internal business environment by using value chain model but also value chain is also suggests the CQU how they should introduce new programs and strategies in the university to gain competitive advantages over other in the same industry. Hence, value chain helped the university to generate long term competitive scope in the market (Stadtler, & Kilger, 2007).
There are a lot of differences can be found among the value chain of CQU and Tinto group. For case, CQU had adopted the concepts of value chain to support academic functions but Tinto Group had adopted this in order to support its business functions and operations effectively. Moreover, CQU had adopted value chain to compete in the local market such as: Australian market. On the other hand, Tinto Group had adopted value chain to gain competitive scope not only at the local but also global level. For case, to maintain the lending position, enhance profit, increase revenue, the company had implemented various concepts and principles of value chain. Hence, it can be said that, both Tinto Group and CQU are using different value chain in term of uses, value, purposes and objectives (Tiku, 2008).
On the basis of above analysis, it can be concluded that, value chain is a dynamic strategic planning tools for all the types of organizations to enhance profit, sales, revenue and attain competitive advantages. Moreover, it can also be summarized that, both Tinto Group and CQU are using value chain concepts and principles in order to compete in their relative industry. But, there are various differences exist among the value chain of these two organizations in term of uses and purpose.
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