Value Chain Analysis and Product Consolidation for Asa Scarf

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Value chain analysis
Value chain analysis is the process by which a firm identifies its vital activities and support
that add value to the final product. These activities are then analyzed and a conclusion made
on how they can be used to reduce the production cost or increase differentiation of the firm’s
products. It is a representation of the process that a firm undertakes in the process of
transforming inputs to outputs (Cruz-Mejia, 2014). The primary aim of value chain analysis
is to identify the most valuable activities of the firm to determine the one that can be
improved to provide competitive advantages for the company. Overall, if a company’s
competitive advantage lies in differentiation, it will then try to develop strategies for
undertaking its activities better than their rivals (Agustina, 2014). If it competes by cost
advantage, it will struggle to carry out its activities at a cost lower than that of its competitors.
Asa scarf is a product produced in France that is required to be introduced into the Australian
and Chinese market. The targeted customers are high end, who want high-quality products
regardless of their cost. Now that the buyers have nothing to do with the price but quality, the
competitive advantage of the scarf producing firm lie in differentiation. Care has to be taken
to ensure that the produced products are of the high quality (Ener, 2015). Currently, the main
source of competitive advantage is innovativeness and technological improvement and
therefore need for value chain analysis. In order achieve competitive advantage through
differentiation, the firm ought to identify the customer value creating activities, determine the
differentiation strategies for improving customer value and later identify the best sustainable
differentiation.
Product consolidation
Product consolidation refers to the processes in which companies or firms merge or
consolidate to act as a single big entity with the aim of acquiring competitive advantage as
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