Question

Value Chain Analysis for Verizon Wireless (1 page)

Part of your current state analysis involves conducting a value chain analysis. Recall that a value chain analysis goes beyond merely identifying the primary and support activities of the organization. Here you want to identify whether and how these activities create value for the firm and the connections among these activities that support (or do not support) the firm’s current strategy.

Questions to consider here include:

• In what activities does the company excel/underperform?
• How do/don’t the activities reinforce each other?
• Do the activities, considered together, paint a coherent picture of the firm’s strategy?

Is the strategy suggested by the activities in-line with the strategy conveyed by the top management team?

Answer 1

ANSWER. Value chain analysis is the process of analyzing a set of activities that a firm operating in a specific industry in order to deliver a valuable product or service for the market. In simple words, value chain represents the internal activities that a firm engages in transforming inputs into outputs. So, it is a strategy to analyse internal firm activities.Value Chain Analysis is classified into primary activities and support activities.

1. Primary Activities: Those activities which are directly concerned with the transformation of input into output and distribution activities are called primary activities. These are:

• Inbound Logistics: It includes activities like receiving, storing, distributing, etc. which make goods and services available for operational processes.
• Operations: It includes the transformation of raw material into the final product to make it ready for sale.
• Outbound Logistics: These activities help in collecting, storage and delivering the product to the customer is outbound logistics.
• Marketing and Sales: The activities like advertising, direct marketing, promotion, sales, marketing research, public relations, etc. that are conducted to make the customer aware of the product or service and to create demand for it, comes under marketing.
• Service: It includes after sales services that are performed to customers so as to improve or maintain the value of the product.

2. Support Activities: Those activities which helps primary activities in achieving the goals are support activities. These are:

• Firm Infrastructure: It includes all the activities and services which the management provides to the whole organization and it includes planning, information management, quality control, finance, legal, government affairs, etc.
• Human Resource Management: It includes all the activities which excel all primary activities of the organization. It refers to overseeing the selection, retention, promotion, transfer, appraisal of staff.
• Procurement: The activity serves the organization, by supplying all the necessary inputs like material, machinery or other consumable items that are required by the organization for performing primary activities.
• Technology Development: Technology development requires high investment activities like research and development and it takes years in such activities. But there benefits can be enjoyed for years too.

Verizon Wireless uses value chain analysis to understand the parts of their operations that create value and those who do not. The firm’s value chain is segmented into primary and support activities. Primary activities are inbound logistics, customer service, operations, marketing and sales, and after sales service. All of these are monitored in a different way.

Verizon Primary Activities

• Firstly they must make certain to have the products that customers demand. They need to have excellent inventory control.
• They have bar code scanners that keep track of what comes in the stores and what goes out.
• They make sure that new shipments of products are being shipped to the necessary stores to meet demand.
• they do customer surveys to know exactly what their customers think of the customer service they receive and feedback directly from their customers on what they need to improve upon and how much they are satisfied with.
• They have many operations to handle on a daily basis like billing and collecting to make sure that they are billing all of their customers the correct amount and receiving the correct payments from customers.
• They conduct market research to better understand their customers’ needs and wants.
• Then, they use various pricing strategies, promotions, and advertising to get their customers.
• Verizon compares their strategies to competitors by comparing & analyzing the number of subscribers to their competitor’s, opportunities and areas of improvement.
• It is impressive that they not only satisfy their customers at the time of sale but also provide after sales services.  Verizon has 24-hour online support that can provide their customers with any assistance they may need.
• They offers warranties to their customers and with a line repair center at Verizon Wireless locations their customers are able to replace and or repair a device.

Verizon’s support activities

• They use recruiting, training, and employee feedback to attract and retain the best and brightest employees.
• They help them in leading the best people and to beat their competitors.
• Verizon’s smartest people do their research and development so they can utilize their research capabilities.
• They also collaborate with different companies to provide their customers with the best products and services.
• They uses niche marketing to target specific groups of individuals by providing high quality service, efficient customer service and improved data transmission rates.

Therefore, the company is performing excel in all the primary and support activities by making full utilization of their all the resources.

Yes, the primary activities reinforce the supportive activities to achieve the best and to accomplish the goals of the organization.