Value Chain - Get as PowerPoint

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					Competing through IT and the
       Value Chain




                               1
     The Value Chain
         Firm     Finance    Accounting     Regulatory    Legal    Quality
Infrastructure                              Compliance            Management
    Human
  Resources
Management

 Technology
Development

Procurement




                 Inbound       Operations     Outbound      Marketing   Service
                 Logistics                    Logistics     and Sales
     The Value Chain for American Airlines
         Firm         Finance          Accounting       Regulatory       Legal     Quality
Infrastructure                                          Compliance                Management
    Human
                                Recruiting, Hiring, Training, Development, Compensation, and
  Resources
                                                      Labor Negotiations
Management

 Technology                                     Computer Reservation System and
Development                                          Electronic Ticketing
                 • Aircraft            • Fuel             • People        • Media agency    • Transportation
Procurement      acquisition           • Food             movers          services          services

                 • Route Selection     • Gate Operations • Baggage        • Promotion       • Lost
                 • Flight Scheduling   • Ticket Counter    System         • Advertising       Baggage
                 • Crew Scheduling       Operations      • Flight         • Frequent          Service
                 • Yield Mgt.          • Aircraft          connections      Flyer           • Complaint
                   System                Operations      • Rental Car     • Travel Agent      Follow-up
                                       • Onboard           and Hotel        Programs
                                         Service           Reservation    • Group Sales
                                       • Baggage           System         • Electronic
                                         Handling                           Tickets
                                       • Ticket Offices



                    Inbound              Operations        Outbound        Marketing       Service
                    Logistics                              Logistics       and Sales
 Analyzing the VC for IT Opportunities

• Improving Effectiveness
• Changing the Activity
• Altering the Relationship between
  Activities




                                         4
• What would the Value Chain look like for
  Wal*Mart, according to Porter?
• How can your emerging technology topics
  be used within Wal*Mart’s value chain?




                                             5
     The Value Chain for Wal-Mart
         Firm         Finance          Accounting          Regulatory     Legal     Quality
Infrastructure                                             Compliance              Management
    Human
                                Recruiting, Hiring, Training, Development, Compensation, and
  Resources
                                                      Labor Negotiations
Management

 Technology                                      Inventory Management System
Development                                     Satellite Communications System

                 • Transportation      • Merchandise        • Data         • Media agency   • Transportation
Procurement      services              • Property                          services         services


                 • Receive inventory   • Stock shelves      • POS          • Advertising    • Process refunds
                 • Store inventory     • Price              • Authorize    •Traiting
                 • Distribute          merchandise          payments         process
                 inventory             • Store operation
                 • Cross-docking




                    Inbound              Operations          Outbound       Marketing       Service
                    Logistics                                Logistics      and Sales
        Wal-Mart, Amazon.com and
       Drugstore.com Reach Settlement
         Agreement – April 5, 1999
   “The computer systems and business processes at Wal-Mart have been
 developed in-house by our associates over many years. We will continue to
 protect the proprietary systems and processes that provide Wal-Mart with a
                           competitive advantage.”

         Robert Rhoads, Wal-Mart Senior Vice President and General Counsel


“What we’ve built here doesn’t exist anywhere else. They’ve replicated things
 that are proprietary. All their ideas about retail distribution come from here.
                               It’s targeted raiding.”

                            Randy Mott, Wal-Mart CIO


          Dell Engineers have more than 200 process-related patents!




                                                                                   7
         The Virtual Enterprise Today
                           Buy           Make / Add Value               Sell



               Suppliers         Back Office         Front Office              Customers
                                    ERP & Electronic Commerce
                                 Manufacturing           Sales
                                   Finance          Support / Service
                                  Engineering          Marketing




                           Supply       Front / Back-Office      Demand
                           Chain           Integration            Chain




Source: The Yankee Group



                                                                                           8
           Risks of IT Success
•   Change basis of competition
•   Lower entry barriers
•   Bring on litigation
•   Increase partners’ power
•   Bad Timing
•   Short-term advantages
•   Inadequate understanding of market
                                         9

				
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