Value Chain Analysis and Product Consolidation for Asa Scarf Marketing

This essay discusses the application of value chain analysis and product consolidation as marketing strategies, particularly for introducing a product like Asa scarf into new markets such as Australia and China. It highlights that value chain analysis helps firms identify and improve valuable activities to reduce costs or differentiate products. For Asa scarf, differentiation is key due to the high-end target market's focus on quality over price. The essay also explores product consolidation as a strategy where firms merge to gain competitive advantage and control prices, suggesting that Asa scarf could use this approach to establish a strong market position by potentially reducing competition. The essay concludes that careful strategic planning, especially in consolidation, is crucial for successful market penetration.

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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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well as having a potential control over the product prices. Firms come together either through
buyout emergence. This move helps to scrape off the small business that is not performing in
the market. Consolidation reduces competition and thus merged firms have the capacity of
controlling the product prices however they wish (Darmawan, 2016). The same strategy can
be applied in Asa scarf. The product is entering a new market where there exists other firm
dealing with the same products at apparently the same prices and quality. The best strategy to
counter this problem is through consolidation where the scarf producing firm will remain the
only operating firm.
If the company needs to command a substantial position in the market it intends to enter, then
absolutely consolidation is the choice (Gereffi, 2016). If the other supplying firms are
scrapped off from the market, the firm will start enjoying monopoly advantages and will,
therefore, be in a position to sell its product at the price it wishes without the threat of
competitors offering the same product at a lower cost (Mudambi, 2015). A fact that has to be
appreciated is that penetrating into a foreign market will not be comfortable with already
established brands dealing with the same products. Therefore wise enough, the Asa scarf
producing firm would better strategize on how to achieve consolidation so as to penetrate the
intended markets with ease.
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References
Agustina, D. (2014). Vehicle scheduling and routing at a cross-docking center for food
supply chains. International Journal of Production Economics, 2 (7), 87-90.
Cruz-Mejia, O. (2014). Lead time performance in an internet product delivery supply chain
with automatic consolidation. Journal of Ambient Intelligence and Humanized
Computing, 4 (7), 76-87.
Darmawan, M. (2016). Value chain analysis for green productivity improvement in the
natural rubber supply chain: a case study. Journal of Cleaner Production, 3 (7), 54-
76.
Ener, S. (2015). Consolidation of cobalt nanorods. A new route for rare-earth-free
nanostructured permanent magnets, 3 (8), 32-44.
Gereffi, G. (2016). Global value chain analysis. The Duke University, Center on
Globalization, Governance & Competitiveness, 3 (7), 74-89.
Mudambi, R. (2015). A global value chain analysis of the ‘regional strategy’perspective.
Journal of Management Studies, 3 (6), 56-67.
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