Value Chain Analysis: Woolworths vs. Australian Tours Co. (MAN515)

This report provides a comprehensive analysis of the value chain designs and structures of two contrasting organizations: Woolworths Limited, a company offering goods, and Australian Tours Co PTY Ltd., a tourism and hospitality company. The report begins with an introduction to the value chain concept, discussing its importance in transforming inputs into outputs and adding value to the final product. It then delves into a detailed comparison and contrast of the value chain designs and structures of the two selected organizations, examining their primary and support activities. The analysis includes a discussion of the advantages and disadvantages of each value chain design, along with an assessment of their operational strategies, strategic visions, core strategies, and competitive priorities. The report concludes by summarizing the key viewpoints of the value chain analysis for both companies, providing a thorough overview of their operations management approaches.

Running head: OPERATIONS MANAGEMENT
OPERATIONS MANAGEMENT
Student’s Name
University Name
Author note

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Introduction
Value chain is considered to the internal activities in which the organization engages
upon transforming the inputs and the outputs. It is considered to be a process through which the
business organization identifies the activities and operations of the business which adds value to
the final product of the organization. These planned activities are analyzed to reduce the cost and
expenditure of the company or increase the differentiation (Antràs and Chor 2013). Value chain
design and structure represents the internal activities and operations of the organization in which
the organization engages with the goods or services produced. These activities directly or
indirectly add value to the final product or service of the organization. The generic value chain
was introduced by M. Porter in the year 1985. The primary activities of the organization includes
the inbound logistics, operations, outbound logistics, marketing and sales and other services of
the others. The support activities of the organization include the technology, machinery and
equipment, the human resource management, procurement of raw materials and the
infrastructure of the organization (Donovan et al. 2015). All these activities result in profit
maximization of the organization. The purpose of this report is identifying the two selected
organization, Woolworths limited which offers goods and other products to the customers and
Australian Tours Co PTY Ltd. which is a tourism and hospitality company. It describes
compares and contrasts the different value chain designs and structure and identifies the
advantages and disadvantages of the value chain design. It determines the operational strategy of
the two contrasting organization. It defines the strategic vision, core strategy and competitive
priorities of the organization for the success of the organization. Lastly it concludes the report by
the viewpoints of the value chain analysis of both the companies and summarizes the report.

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Discussion
Value chain design and structure of Woolworths Limited
Woolworths undertakes a highly rigid and standalone framework of value chain design
and structure. The company assigns equal importance to all the activities of the organization.
However, it is needed to realize the activities and functions that specifically require the same
level of scrutiny (woolworths.com. 2019 ). The initial step of adapting to the Porters Value chain
design is to identify and determine the importance of activities as per the role of the goods of
products in the process of delivery.
Primary activities of Woolworths Limited
The primary activities of Woolworths Limited are directly involved with manufacturing and
selling the produced items and goods to the customers of the organization.
Inbound logistics
The company maintains a strong bonding and builds long term relationship with the suppliers of
the organization which is highly essential to receive, distribute and store the products offered
(woolworths.com. 2019 ). The inbound logistics of the organization enables the company to
focus on each aspect of transformation beginning from raw material to finished product. Other
primary activities in the inbound logistics of the company include acquiring the raw materials,
storing the raw materials and inputs and they distribute the inputs and raw materials as well as
other components to begin the initial stage of starting the production.
Operations of the company
The operations of the company involving processing the raw materials on its arrival and process
the raw materials into final product (woolworths.com. 2019 ). After processing the raw materials

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and transforming into the finished product, it launches the product in the market. Other
operational activities of the company include machining, packing the products and the items,
assembling the items and testing it. Repairing the items and maintenance of the product offerings
are also included in the operational activities of the organization (Hilton and Platt 2013). The
operational activity of the organization is crucial for improving the productivity, increasing
effectiveness and efficiency and ensuring long run success of the company. The effectiveness of
the operational activities of the company is vital for consistent growth of economy, increase in
productivity and other forms of competitive advantage (Hilton and Platt 2013).
Outbound logistics of Woolworths
The activities of outbound logistics include the entire process of delivering the products and
items to the customers through the use of several intermediaries and middlemen or through its
own outlets. The activities involved in the process of outbound logistics include processing,
transporting and delivering it to the destination. Timely management of the organization along
with optimal costs and the process of product delivery process enable the company to increase
the level of customer satisfaction and increase the growth opportunities of the organization
(Humphrey and Schmitz 2012).
Marketing and sales
For its marketing and sales activities the company highlights the benefits and the points of
differentiations to persuade the customers to buy the product offerings of the company rather
than their competitors (Gereffi, Humphrey and Sturgeon 2015). The marketing and sales
activities of the company involves advertising, promotional activities, pricing building
relationship with the customers, channel selection and maintaining relation with the channel
members. The company tactually integrates the marketing and the sales activities for developing

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its brand equity and marketing position (Gibbon, Bair and Ponte 2018). As per the core company
strategies, it avoids false commitment to its products features and carries out its business
operations honestly and in an ethical manner.
Services
The company offers the pre sale and the post sale services which in turn help the company to
develop a deeper connection with the customers and develop customer loyalty (Gibbon, Bair and
Ponte 2018). The post sale activities are essential for marketing and promotional activity. The
company initiatives support activities to build image and reputation.
Secondary activities of Woolworths Limited
The secondary activities are known as the support activities which play an important role
in coordinating and facilitating the primary value chain activities (woolworths.com. 2019 ). The
secondary activities of Woolworths limited are discussed below:
Infrastructure of the company
The supporting activities of the organization include range of activities including legal handling
of matters, accounting, strategic management, financing and quality management. These
activities enables the company optimize the value of the entire value chain design and structure
(Timmer et al. 2014). The company controls its infrastructure activities for strengthening the
competitive position of the company.
Human resource management
The activities involved in human resource management of the organization include recruitment,
selection, rewards, training and performance management of the employees and other workers of

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the organization (Theyel 2013). These human resource activities of the organization enable the
company to reduce the competitive pressures on the basis on skills, commitment and motivation
of the workplace. The company is highly dependent on the talent of the employees and increase
the importance of the activities represented in the value chain design and structure of the
organization (Gereffi and Kaplinsky 2011).
Technology development
The company focuses on integrating the operational activities such as production of goods and
products, distribution, marketing and sales, human resource through technological integration the
technological activities of the organization includes technology supported customer service desk,
product design research, data analytics and automation software (Gereffi 2013).
Procurement
The procurement activities of the company involves purchasing of inputs from equipments,
machinery, supplies, raw materials and other items that are required for manufacturing r
producing the final product or good (Gereffi and Kaplinsky 2011). The company considers the
activities of procurement to optimize the outbound, inbound and operational value chain.
Advantages of value chain design and structure of Woolworths
 Identify the sources of competitive advantage: through its planning process the company
can identify the sources of competitive advantage (Gibbon, Bair and Ponte 2018). These
activities of Woolworths can act as a barrier to entry of new firms in the industry.

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 Identify internal and external linkages: By analyzing and studying the interrelationships
and interdependencies the company through internal and external linkages it can benefit
from coordination.
 Improved flow of materials and information: through continuous evaluation of the value
chain it can identify the gaps affecting productivity and minimize delays through tracking
activities (Gibbon, Bair and Ponte 2018).
Disadvantages of the value chain design and structure
 Segregating and dividing different activities can increase the level of complexity.
 The process of diving the activities of the organization can be highly time consuming and
acquiring information becomes difficult (Humphrey and Schmitz 2012).
 Implementing the design value chain required detailed expertise.
 It is difficult to acquire information about the business information system which is not
structured accordingly.
2. Value chain design and structure of Australian Tours Co PTY Ltd.
The Porters value chain model is used by various production forms and industries,
however, there has been limited studies ad research regarding the service sector. Therefore, the
tourism and hospitality industry develop value chain design and structure for the purpose of
gaining competitive advantage (Gibbon, Bair and Ponte 2018). The tourism industry is highly
liberalized with various integrated and interdependent sub sectors. The value chain design and
structure is considered to be as a system in the tourism company. Specifically, Australian Tours

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Co PTY Ltd operates with the transportation of tourists, establishment of hotels,
accommodations as well as food facilities (Donovan et al. 2015). The tourism value chain design
of the company also includes non-tourism sectors, support institutions and other direct service
providers. The direct service providers include transportation, communication, food and travel,
holiday planners, recreational activities. The support institutions include Tourism informational
office, Ministry of transport, ministry of tourism and transport and tourism training centers. The
non tourism sectors include the agriculture sector for providing the food and beverage service
providers.
Direct service providers
Primary customer benefits package
Holiday planning: Australian Tours Co PTY Ltd decides to plan the holidays and travel through
the travel agencies, tour operators and online services. The sub operations of the company
include travel agencies, tour operators and other online service providers
(Australiantoursco.com.au. 2019)
Transportation: It involves the transporting vehicles like ground maritime, air transport vehicles
and cars by which the guests and the tourists can reach the destination. It begins with the arrival
of the destination and while leaving the destination.
Accommodation: Australian Tours Co PTY Ltd provides accommodation facilities to the tourists
and the travelers. It enables the company to have a great diversity and value in the value chain
design of the company (Gereffi and Kaplinsky 2011).
Food and beverage facilities: The establishments of food and beverage are highly diversified.
The outlets are mostly private and public sector establishments.

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Recreational activities: Australian Tours Co PTY Ltd offers various shopping and recreational
activities which play an important role in the value chain of the tourism industry. These activities
enables the company to use it for the purpose of promoting as well as it acts as an additional
income to the company (Timmer et al. 2014). The activities offers by the company include
exhibitions, film festival and concerts.
Profiling and pitching: Australian Tours Co PTY Ltd concentrates on building network and its
brand through better networks. Through its network building effort the company gets low cost
referrals. It has more sole sourced work and understanding of the client insights (Timmer et al.
2014). The pricing and selling price with additional discount and offers enables the company to
capture more value.
Communication and promotion: Australian Tours Co PTY Ltd has a better client
communication and engagement through the right combination of talent technology and tools.
This enables the company to increase the chance of client satisfaction and loyalty.
(Australiantoursco.com.au. 2019)
Controlling and service delivery: It motivates and inspires the employees through various staff
engagement programs which ensure the company with better quality service delivery.
Service innovation: Australian Tours Co PTY Ltd evolves their service offerings to address the
needs of the market (Theyel 2013).
The Support Institutions
The ministry of tourism and culture: The Ministry of Culture and Tourism performs the function
of maintaining, developing, evaluating, promoting and adapting to the values if the culture
(Australiantoursco.com.au. 2019). It can prevent the destruction of the cultural and the historical

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values, it evaluates the opportunity of tourism in the country and co-operate with the
organization (Donovan et al. 2015).
Provincial Culture and Tourism Directorate: these support institutions help the business
organization to apply the objectives and goals of the tourism and culture industry.
Tie-up with the travel agencies: the main objectives of the tourism agencies are developing the
agency profession while being in harmony with country’s economy and tourism sector.
Touristic hotels and other associations: The main objective of the touristic hotels and
associations are to meet the needs and demands of the occupational groups and the
accommodation industry (Australiantoursco.com.au. 2019). This facilitates the occupational
activities and improves the general interests for the purpose of ensuring reliability among the
occupational groups (Donovan et al. 2015). It also ensures and facilitates the tourism industry to
develop as per the requirements and ensure coordination with the members and the
organizations, entities and persons within or outside the industry.
Other Associations: Australian Tours Co PTY Ltd has both local and international associations
in the tourism sector (Donovan et al. 2015). These associations help the company and offer
solutions to the existing problems and develop the tourism sector.
Advantages of value chain of Australian Tours Co PTY Ltd
 The value chain model of Australian Tours Co PTY Ltd is used for assessing the areas in
which the company should be focusing more upon.

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 In order to bring innovation in their services and digitalizing their business offerings, the
company can use the value chain design to analyze the areas to be focused on such as
change and investment (Gereffi, Humphrey and Sturgeon 2015).
 By analyzing the value chain design the company can assess the resources and analyze
the areas to be invested upon.
 By analyzing the elements of the value chain design the company can recognize the
prospects for new clients and determine the key weakness.
Disadvantages of the value chain design and structure of Australian Tours Co PTY Ltd
 Australian Tours Co PTY Ltd might divert from the main strategy and vision of the
company as the operations of the company are divided into segments (Gereffi, Humphrey
and Sturgeon 2015).
 Creating efficiency in the value chain activities are essential, however, linking different
activities in the value chain design is difficult and time consuming.
Comparison and contrast of the two value chain designs
The main difference between the two industries are mainly is that the Woolworths ltd,
has their primary inputs as the physical labor including the shipping and packaging of goods and
items. whereas on the other hand, the service industry, Australian Tours Co PTY Ltd requires the
primary inputs in the form of developing long term relationships and engaging with the
customers (Gereffi and Kaplinsky 2011). The manufacturing industry Woolworths Ltd. engages
themselves with the primary activities regarding manufacturing the items and moving the

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finished goods to the customers. On the other hand, the service industry, Australian Tours Co
PTY Ltd is not involved with the physical movement of materials and goods but information is
exchanged with the customers via, travel agents, other institutions or directly on the phone or
online. For the service industry, various tools and software is used for influencing the flow of
communication (Curry 2016). The major difference in the value chain design is the primary
activities of both the organizations. However, both the industries aim to improve the overall
efficiency of the organization by analyzing their value chain design and improve the operations
by reducing costs or the speed of delivery. Woolworths aim to reduce the challenges by
optimizing their business activities and operations (Humphrey and Schmitz 2012). While on the
other hand, Australian Tours Co PTY Ltd aims to build better relation with the support
institutions and build long term relations with the partners and customers for gaining their
support the company in its weakness and overcome loopholes. By analyzing the value chain
design of the company, it optimizes the business and helps the company to overcome bottlenecks
and challenges (De Backer and Miroudot 2014).
The strategic aim of Woolworths Company is to deliver best quality convenience and
value to their customers. The company aims to reflect their passionate commitment towards their
customers. It is the strategy of the company to differentiate its offering and accelerate innovation
in its product offerings (Gereffi and Kaplinsky 2011). The company concentrates on its
supporting activities such as strategic management, accounting and quality management for
strengthening its competitive position in the market. The primary operations of the company
include processing of raw materials into final products and delivering it to the customers. It
continuous aims to improve its customer experience. On the other hand, Australian Tours Co
PTY Ltd is associated with offering services to tourists and the travelers with accommodation

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facilities, transportation facilities and food facilities (Gibbon, Bair and Ponte 2018). The strategic
aim of the company is to create a significant client image and innovate its service offerings to the
clients, stimulation of sales, organization various tourism events. For maintain its competitive
the company build network and understanding the insights of the insight. It continuously evolves
its service offerings as per the needs and benefits of the customers (Theyel 2013).
For the success of any business organization, it is essential for the operations
management to effectively analyze the value chain for gaining and sustaining its competitive
advantage as mentioned by Porter (Gereffi and Kaplinsky 2011). The operational department of
the organization must have a deeper understanding of the firm’s value chain and identify the
ways in which the entire organization fits in the overall value system. They must be efficient
enough to design the value chain in such a manner that there are fundamental linkages to support
the separate activities within the chain (Gereffi and Kaplinsky 2011). The value chain analysis
must be applied for determining the goals for the suture success of the organization.
Conclusion
The report has identified the value chain design and structure of Woolworth’s limited
company which is associated with the distribution of final goods and materials directly to the
consumers through distribution channels, intermediaries or through their own outlets.
Contrasting to the value chain design of the Woolworths limited, the value chain of Australian
Tours Co PTY Ltd has been identified. The value chain of both the companies has been
discussed in details including the primary activities, operations and the support activities or
institutions of the companies. It is stated the advantages and disadvantages of the value chain
design of both the industries. Lastly, it compares and constructs the value chain of both the

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industries in terms of operations, main activities, strategies, vision and competitive priorities. It
has been identified the Woolworths is mostly associated with dealing and handling the physical
materials and goods and distributing it to the customer, while on the other hand, Australian Tours
Co PTY Ltd is mostly associated with offering information and service to the tourists and the
guests through travelling agents. Further, it has identified the ways in which the operations
management to make the organization a success.

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