Question

How does your organization or any organization for that matter create capabilities value in a globally competitive environment?

Please Cite if need be**

Answer 1

In this global environment where survival of the fittest is the norm, organizations need to buckle up and create maximum value to their customers to stay ahead of the race. Competition is inevitable everywhere and it turns out to be a necessary evil. On one hand, organizations can get panicky witnessing the progress made by competitors, and on the other hand it can encourage organizations to better the business strategies.

So, to stay relevant in this competitive environment, organizations need to focus on creating that extra value that customers never experienced.

Strategies to stay ahead in the market:
The value addition varies in different industries. In industries that produce tangible goods like FMCG and electronics, customers consider the quality of the product as the value add. In service industry, value addition happens with intangible experiences. For instance, the telecom industry could thrive only if the network is good with minimal call drops and maximum internet speed.

In management studies, Value chain comprises of primary activities that generate the organization's business value. It also emphasizes the importance of support activities that is the backbone behind the operations of the business. The below diagram shows the detailed structure of how primary and support activities can create value to an organization.

The profit margin of an organization = value add - cost incurred.

Taking 'Coca cola' as an example, Primary activities would include manufacturing the product, packaging the product into well designed bottles, marketing the finished product in the right market segment to gain maximum customer adoption.

The secondary activities would include procurement of materials needed to manufacture the end product, recruiting staff, legal and advisory management and taking care of human resources.

In this example, only if all theses activities go hand in hand, can the organization survive and add value to the customers in this globally competitive environment.