This report focuses on the identification of the primary and secondary activities evident in the business model of Latureae, a health and wellness company, which is based in Australia and also focuses on providing recommendations to the top management regarding enhancement of their customer values.
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Running head: INFORMATION SYSTEM ANALYSIS Information system and critical analysis Name of Student: Name of College: Authors note: 1
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INFORMATION SYSTEM ANALYSIS Contents Introduction......................................................................................................................................3 Discussion........................................................................................................................................3 Conclusion.......................................................................................................................................7 References........................................................................................................................................9 2
INFORMATION SYSTEM ANALYSIS Introduction There are various activities within an organization which either helps in creating values for the organization or helps in earning competitive advantage for an organization. Therefore it is very essential to identify the various factors which help an organization to create value for its product or service or to earn competitive advantage for the organization. As organizations operate in diverse sector therefore the activities of organizations differ from sector to sector. There are two types of activities which are mainly observed in organizations namely primary activities and secondary activities or supporting activities. The primary activities help in adding values to the production process of an organization whereas the secondary values help in earning competitive advantage. The primary activity varies from one organization to other whereas the support activities remain same for all organizations. This report focuses on the identification of the primary and secondary activities evident in the business model of Latureae, a health and wellness company, which is based in Australia and also focuses on providing recommendations to the top management regarding enhancement of their customer values. Discussion Value chain analysis is a process through which an organization identifies their primary and secondary or support activities which helps in adding values to the final products of the company. As stated byRawlins, De Lange & Fraser (2018)the analysis of the primary and secondary activities helps an organization to reduce costs and to increase differentiation. In other words the value chain analysis is a strategic tool which helps in analysing internal activitiesof a firm. The ultimate goal of the value chain analysis is to recognize which activities are more valuable to an organization and which activities could be improved in order to assist in providing better competitive advantage to an organization. Identification of primary activities and Secondary Activities The primary activities which help in adding values directly into the production process of Latureae are inbound logistics, operations, outbound logistics, Marketing and sales and services. 3
INFORMATION SYSTEM ANALYSIS The various sub activities which are linked with theprimary activitiesof Latureae is as follows: Inbound logistics- The sub activities which are associated with the primary activity of inbound logistics at Latureae are receiving raw materials from suppliers, quality control, control of raw materials, supply scheduling and strategic relationship with suppliers and effective supply chain management. The sub-activity which creates value for Latureae in this primary activity are quality control and effective supply chain management.The effective quality control measures which are in place helps in manufacturing high quality products which facilitates the high demands of the products among the customers. The link between the value-creating activities and sub activity is that the effective quality control measures which are in place helps in manufacturing high quality products which facilitates the high demands of the products among the customers. Another link between the value-creating activities and sub activity is that the effective management of the supply chain of Latureae ensures effectiveness in the sourcing, warehousing and distribution of products in the market. Operations-The sub activities which are associated with the primary activity of operations at Latureae are conceptualization, operational processes, packaging, production control and quality control,maintenanceofproductionprocessandconversionofrawmaterialstofinished products.Thesub-activitywhichcreatesvalueforLatureaeinthisprimaryactivityare operational processes and production control. The link between the value-creating activities and sub activity is that the high quality and innovative operational process and procedures of Latureae help in increasing the sale of the products of the company. Another link between the value-creating activities and sub activity is that the production control process which is followed in Latureae ensures effectiveness of order handling, dispatch and timely delivery of the products. While other link between the value- creating activities and sub activity is that the production control process which is followed in Latureae ensures effectiveness of order handling, dispatch and timely delivery of the products. Outbound Logistics- The sub activities which are associated with the primary activity of outbound logistics in Latureae are finishing goods, order handling, dispatch, delivery, invoicing, 4
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INFORMATION SYSTEM ANALYSIS warehousing, effective integration of IT tools, absence of any kind of intermediaries.The sub- activity which creates value for Latureae in this primary activity are effective integration of IT tools and absence of any kind of intermediaries. The link between the value-creating activities and sub activity is that the effective integration of the IT tools in the operations of Latureae helps in supply chain management which helps in increasing the effectiveness of the supply chain and also helps in building better relationship with the suppliers. Another link between the value-creating activities and sub activity is that the absence of any kind of intermediaries in the distribution process of the products helps in ensuring that the prices of the products remains constant which helps in increasing their sales. Marketing and Sales- As stated byRosaleset al. (2017) the sub activities which are associated with the primary activities of marketing and sales in Latureae are channels to market, the pricing oftheproducts,theadvertisementsoftheproducts,thepromotionoftheproducts,the distribution of the products, customer value of the products, cost to consumer, communication process, convenience, customer management, market research and analysis of the sales. Service-The sub activities which are associated with the primary activities of service in Latureae are greater emphasis on services, training and development of employees and emphasis on customer satisfaction. The varioussupport activities or the secondary activitiesof Latureae is as follows As opined byEl-Sayed, Dickson & El-Naggar (2015)thesupport activities or the secondary activitieswhich helps in providing competitive advantage to Latureae are Firm infrastructure, human resource management, procurement and technology development. There are various sub- activities which are associated with the secondary activities or support activities of Latureae which are as follows: Firm Infrastructure-The various sub activities which are associated with the secondary activity of firm infrastructure in Latureae are various set of support activities of the company in the form of general management, marketing, accounting, IT, planning and finance. Human Resource Management- The varioussub activitieswhich are associated with the secondary activity of human resource management in Latureae are employee retention, employee 5
INFORMATION SYSTEM ANALYSIS motivation, training and development of employees, effective hiring and recruitment process of the company and employee remuneration. Procurement- The various sub-activities which are associated with the secondary activity of procurement in Latureae are purchase of assets and raw materials and supplier management. Technology Development- As stated byLiao, Hu & Ding (2017)the various sub activities which are associated with the secondary activity of technology development in Latureae are process design, product design, research and development, use of advanced technology, market testing, product testing, use of equipment and latest technology in production and distribution and customer research. The above mentioned secondary or supporting activities which are associated with business model of Latureae helps the company to earn competitive advantage in the market as the supportingactivitiesorsecondaryactivitiessuchasfirminfrastructure,humanresources management, procurement and technological development helps in increasing the operational efficiency and also helps in reducing costs for the company which helps in earning competitive advantage for the company. 1.Firm InfrastructureMargins 2.Human Resource Management 3.Technology 4.Procurement a. Inbound Logistics b. Operations c. Outbound Logistics d. Marketing and Sales e. Service Fig:Porter’s value chain model Source: Author 6
INFORMATION SYSTEM ANALYSIS The above figure presents various activities and sub-activities of the Latureae business model using Porter’s value chain model. The primary activities of the Latureae business model are inbound logistics, operations, outbound logistics, marketing and sales, and the support activities of the Latureae business model are firm infrastructure, human resource management, technology and procurement. Recommendations The recommendation which can be made to the Latureae management regarding enhancing or maximizing the value offered to the customers is by learning more about current and future customer behaviour by using customer behaviour modelling technique which helps in identifying behaviour among groups of customers to predict how similar customers tends to behave in the similar situation and not just be relying on historical data. According toMartelo, Barroso & Cepeda (2013)another recommendation which can be made to the Latureae management regarding enhancing or maximizing the value offered to the customers is by effective customer segmentation which will help the company to segment customers in to small groups and accordinglyaddressindividualcustomersbasedontheiractualbehaviour.Theother recommendation which can be made to the Latureae management regarding enhancing or maximizing the value offered to the customers is by lowering the cost to serve to the customers by implementing different strategies such as to stop marketing to low value customers or by moving customers to lower cost channels. Conclusion From the above report it is clear and evident that the business model of Latureae consists of various primary and secondary activities with various sub-activities associated with it. The identification of the various primary activities and secondary activities along with its various sub-activities is very vital from the organizational point of view as it helps in identifying the factors which creates value for the product and services of a company in the market. The identification of various primary and secondary activities along with various sub-activities is also very essential as it helps in identifying the source of competitive advantage for a company. The identification and analysis of the various primary and secondary activities along with its sub- activities is important for a company as it helps in modifying the activities of the company which 7
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INFORMATION SYSTEM ANALYSIS helps in earning competitive advantage for the company or helps in creating values for the company. 8
INFORMATION SYSTEM ANALYSIS References El-Sayed, A., Dickson, M., & El-Naggar, G. (2015). Value chain analysis of the aquaculture feed sectorinEgypt.Aquaculture,437(C),92–101.Retrievedfrom: doi:10.1016/j.aquaculture.2014.11.033 Accessed as on 4/10/2018 Liao, S., Hu, D., & Ding, L. (2017). Assessing the influence of supply chain collaboration value innovation, supply chain capability and competitive advantage in Taiwan’s networking communication industry.International Journal of Production Economics,191, 143–153. Retrieved from: doi:10.1016/j.ijpe.2017.06.001Accessed as on 4/10/2018 Martelo, S., Barroso, C., & Cepeda, G. (2013).The use of organizational capabilities to increase customer value.Journal of Business Research,66(10), 2042–2050. Retrieved from: doi: 10.1016/j.jbusres.2013.02.030Accessed as on 4/10/2018 Rawlins, J., De Lange, W., & Fraser, G. (2018). An Ecosystem Service Value Chain Analysis Framework: A Conceptual Paper.Ecological Economics,147, 84–95. Retrieved from: doi:10.1016/j.ecolecon.2017.12.023Accessed as on 4/10/2018 Rosales, R., Pomeroy, R., Calabio, I., Batong, M., Cedo, K., Escara, N., Facunla, V., et al. (2017).Value chain analysis and small-scale fisheries management.Marine Policy,83, 11– 21. Retrieved from: doi:10.1016/j.marpol.2017.05.023Accessed as on 4/10/2018 9