Analysis of Retail Business in Oman: Porter's Value Chain

This report provides a comprehensive analysis of the retail business in Oman, focusing on the application of Porter's value chain management. The report begins with an executive summary outlining the objectives and scope, followed by an introduction that defines the purpose and structure of the analysis. It then delves into the core concepts of Porter's value chain, including its definition, purpose, merits, and weaknesses, alongside a detailed explanation of how it creates value within a company. The report uses the Landmark Group as a case study to illustrate the practical application of Porter's value chain, examining both primary activities like inbound logistics, operations, and marketing, and support activities such as technology, human resource management, procurement, and firm infrastructure. The analysis includes recommendations and a reference list to support the findings, offering a complete overview of strategic management in the retail sector of Oman.

Running head: RETAIL BUSINESS IN OMAN
Retail Business in Oman
Name of the Student
Name of the University
Author Note

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Executive summary
The aim of the report is to analyze the key aspects of Porters value chain management. In order
to get a clear picture about Porter’s value chain management and analyze how the strategic
management tool works, a company has been chosen as an example. The chosen company is
Landmark group. The report would shed light on all the facets of Porter’s value chain
management and discuss its advantages and disadvantages as we.. the port would also help the
reader to analyze how porter’s value chain are applied by business organizations, with special
reference to Landmark group.

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Table of Contents
Introduction......................................................................................................................................2
Analysis of VALUE of a company..................................................................................................2
Porter’s Value Chain Definition and description.............................................................................3
Need and purpose of porter’s value chain.......................................................................................4
Merits of Porter’s value chain..........................................................................................................5
Weaknesses of Porter’s Value chain................................................................................................6
Application of Porter’s value chain.................................................................................................8
Primary activities of Landmark group:............................................................................................9
Inbound Logistics:...........................................................................................................................9
Operations......................................................................................................................................10
Marketing and sales.......................................................................................................................11
Support activities...........................................................................................................................13
Technology....................................................................................................................................13
Human resource management........................................................................................................13
Procurement...................................................................................................................................14
Firm infrastructure.........................................................................................................................14
Recommendations:........................................................................................................................15
Reference List................................................................................................................................15

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Introduction
The report intends to project a clear picture of Porter’s value chain management and its
application. Porter’s value chain is an important tool that is used by most of the business
organization at any given time. The objectives of the report are to uncover the key facets of
Porter’s value chain management. The report will cover all the details of Porter’s value chain
starting from its definition till its application. The report also covers the functional quality of the
strategic management tool. Apart from that the advantages and the disadvantages of using
Porter’s value chain as a strategic management tool are also discussed in the report. In order to
understand in detail the application or Porter’s value chain, Landmark group has been taken as an
example.
Analysis of VALUE of a company
The phrase “Porter’s Value Chain Analysis” brings forefront about a simple question;
that is how does organization creates values and what are values for an organization. In order to
put it simple, the processes and the methods that are undertaken by the management and the
officials of any organization to change the inputs of the company into outputs in a fashion that
the total cost spent on processing the inputs are lower than the processed output (Miles 2015).
This very process according to which the marginal price of processing the inputs are kept lower
than the final price of processed outputs makes all the difference. This process is not just a
question but holds the fundamental importance that focuses in the economic trajectory of a
company. The economic trajectory in correspondence implies the reason that a company is held
in the first, middle or lower sections (Palandeng et al., 2018).

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However, the process of creating values is not that simple. At the very first hand, values
are created by retailers in the way raw materials are collected from different sources and
suppliers and turning the raw materials into usable products and services. The sections related to
distribution of products and services are taken care of by the retailers. That is the retailers ensure
that the products are well packed and are available to the customers. The selling price of the
products holds the value of the company. Put in a simpler form,
The value that is created by the company – total cist incurred for creating the value = the
marginal profit of a company (Grant 2016).
Creating value benefits a company in myriad ways. When the value that is created by the
companies are more, the marginal profit also tends to be on the higher side. The added advantage
is the competitive edge that a company builds (Schmidlin 2014).
Porter’s Value Chain Definition and description
Porter’s value chain is a measuring tool that was invented ad developed by Michael
Porter, of Harvard Business School. Porter defined vale chain as the chain of activities are
related to an organization in creating values to the company. That is the chain of processes like
designing, producing, marketing, delivering and performing the supportive tasks for products and
services can be termed as Porter’s value chain (Rothaermel 2015). Value chain takes into
consideration the very initial of the processes, that is collecting raw materials till the sales of the
end product. Value chain can majorly be divided into two categories. According to Porter, value
chain consists of primary and secondary activities where primary activities are chiefly
concentrated in the operations department, distribution of products and services and sales. The

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secondary activities are also known as support activities which takes into consideration human
resource department.
Need and purpose of porter’s value chain
Companies to identify the opportunities that are related to secured cost advantages chiefly
use Porter’s value chain. Companies and organizations also use Porter’s value chain to identify
the opportunities in the context of creation of new products and services and create a difference
from all the other existing products in the market (Porter and Kramer 2019).
The figure attached below shows the various sections of Porter’s value chain and the process
in which it works. The primary activities of Porter’s value chain creates the product, maintains
the logistics, transfers the products from warehouse to the retail stores and sells. Put in simpler
form, it maintains the
 Inbound logistics
 Outbound logistics
 Operations
 Sales and marketing
 Service and support
The secondary or the supportive activities consists of human resource department,
departments related to technological development and procurement

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Merits of Porter’s value chain
 Porter’s value chain is a strategic tool that is imperative to any business organization. It
particularly helps in the identification of the competitors of a specific business. Apart
from that it also helps to analyze the strategies that are followed by the rival companies
that are responsible for flourishing them.
 Porter’s value chain is a flexible tool that can be used tactfully by the management and
the officials of a company to diagnose and invent competitive advantages on the factors
of cost and differentiation (Christopher 2016).
 Companies and organizations can use Porter’s value chain in order to understand the
different issues faced by the employees to keep up with the promises of commitments
related to value products for the customers. It particularly helps to draw the focus towards
the processes and methods that needs to be undertaken so that the proposed values to the
customers can be fulfilled.

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 Though, SWOT analysis provides any company with an insight about the threats,
weakness, strengths and opportunities. Yet, Porter’s value chain analysis can be used to
compare the business model of a particular company with the other models that are
followed by other companies to have a clear insight about the weakness and the strengths
of the other companies. The former company to draw advantages can use the strength and
weaknesses of the rival companies, thus acquired (Ayers and Odegaard 2017).
 Porter’s value chain and its advantages are yet not over. For its advantages in business
context, it is being taught in almost all the business schools for the last twenty to twenty-
five years.
Weaknesses of Porter’s Value chain
Similar to all other tools, Porter’s value chain also her certain demerits or disadvantages.
The major disadvantages of using Porter’s value chain are listed below
 Since Porter’s value chain is a model that is flexible enough, its flexibility results in using
the tool to a particular context. Business and its situations are susceptible to change.
Porter’s value chain cannot take hold of the changing scenarios in business.
 Porters value chain can work at its best when the tool is applied to manufacturing
business. Not all sections of business can make the best use of Porter’s value chain since
the concept as held in Michael Porter’s boob “Competitive Advantage” talks about the
system in the context of manufacturing industries (De Marchi, Di Maria and Gereffi
2017).

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 Porter’s value chain is a complex strategic tool. That is, in order to make a proper
analysis it may take a lot of time for organizations. Moreover, it must be understood that
the scale and scope of Porter’s value chain may take a large amount of time if done
correctly. However, once done it will be able to focus on the key strategies that are used
by rival companies in order to succeed.
 Porter’s value chain is a concept that is known by all. The difficult part is the way one
uses it. Its usage is uncommon and a very few holds expertise in it. Thus while hiring
experts companies need to be sure that the employee have a background experience and
can make the proper use of value chain. It is a sensitive tool and if not operated in proper
manner, the company may face loss. At times, there are risks that the company would be
taken into wrong directions as well.
 Adaption of the concept of value chain on one hand while it has increased the chances of
identifying the strategies that are used by rival companies and helped to spot the rival
companies. On the other hand it has also significantly reduced the crave for innovation,
understanding and creating competitive advantage for companies. The more it is potent in
identifying the rivals and the competitive strategies used by rivals, the more these
companies are de-motivated of innovating techniques since it feels the techniques will be
spot by Porter’s value chain.
 However, another interesting facet of porter’s value chain is that due to that that it is
capable for identifying strategies and rivals, new information technology firms are using
business information systems that are secured. That is, Porter’s value chain will be unable
to identify the competitive strategies that are used by these rival companies since the
system will be locked and secured.

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Application of Porter’s value chain
In order to understand the application of Porter’s value chain, a company can be taken as
an example. Landmark group is the company that has been chosen in this context. Application of
Porter’s value chain in Landmark group will help to draw a clear picture about the process and
work of Porter’s value chain.
Landmark group is one of the largest retail chains in Oman. It also operates in Middle
East, Africa and India. Founded in 1973 by Micky Jagtiani, apart from retail business it also
holds expertise in hospitality and loyalty business. Some of the most popular international brands
that the retail sectors of Landmark group deals with are babyshop, Splash, SHOEMART,
centrepoint, iconic. Homecentre, shoeexpress, lifestyle and many more. The key strengths of the
company lies in the fact that the employees of the industry are talented, the operations are done
with efficiency and logistics are emphasized upon. Landmark group is the proud employer of
approximately fifty five thousand employees across the world and have a total of fifty seven
brands in its retail stores. It also have approximately two thousand three hundred company
outlets or retail stores and has a retail space of thirty million square feet. From the measures it is
self assertive about the royalty of the gigantic organization. The organization operates chiefly in
twenty two countries across the globe. The company has reputation good enough across Middle
East, Africa and Indian subcontinent. The main products that the company deals with are
Apparels, footwear, consumer electronics, home improvement, furniture, hotels, E-commerce,
healthcare and malls. The gross revenue that has been recorded in the year 2016 is of US $6
Billion. The Landmark group is mainly focused in MENA region. It has its headquarters in
Dubai, United Arab Emirates.

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The success of Landmark have been skillfully handcrafted by its founder Micky Jagtiani
and his wife, the CEO and chairwoman of Landmark group Renuka Jagtiani. Renuka Jagtiani
has made major contribution in the context of expansion of Landmark group. She was the lead of
strategic plan for expansion of the business overseas, launching the franchise divisions of the
company and initiating e-commerce platform for the same. The main driving force behind the
CSR objectives of the company is also her.
Having analyzed the prospects and the success of the gigantic organization, a deeper
delve towards the working process can be made. Applying Porter’s value chain in Landmark
group it can be asserted that the company applies the tool in apt manner to look for an
competitive edge (Porter and Heppelmann 2015).
Primary activities of Landmark group:
Inbound Logistics:
Owing to the space and strength of the organization, it is well understood that the
suppliers of the company are scattered in more or less all geographical locations. The suppliers
of landmark are the most important contributors to the company, since it is only because of the
suppliers that the company has been able to keep its price lower as compared to the competitors
in the market. Given the fact that, it buys raw materials in large quantities the prices are
affordable (Johnson 2016). As such, managing prices are not difficult. More or less the company
holds good bargaining power in this context. Apart from that since Landmark group buys a lot of
quantity the prices are taken in wholesale basis. Landmark has successfully strived through and
makes implementation of the strategies related to inventory management and supply chain

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management. This way the company has been able to manage successfully its supply chain costs.
Not only the company has mastered the art of implementing strategies related to supply chain
management and inventory management but at the same time, it also makes an appropriate use of
the technology.
Landmark group has equally potent sales in mobile apps and other e-commerce portals.
The company has been able to keep with excellent logistics due to which the suppliers deliver
raw materials in time as per the requirement. Since the delivery is made in time, the costs are
also low. There are certain code of conduct that are applicable for the suppliers of Landmark
group. In order to keep the prices low and to maintain the lowered prices, the company aims at
establishing long-term professional relationship with the suppliers. Apart from that long term
relationship also helps the company to offer the suppliers with the potential for high volume
purchases (Johnson 2016). Lastly, it can be said that Landmark group has been able to manage its
supply chain through the maintenance of the strategic partnership with its suppliers across the
globe (Porter and Heppelmann 2014).
Operations
As already known, Landmark operates chiefly in retail sector. It is also one of the largest
leading retailer chains across the globe. At present, it has been seen that Landmark operates in 22
different countries and has a total of 2300 retail outlets with more than fifty brands working
under it. It has a total of 44 years of experience until 2018. Out of the total brands the company
has 27 in house brands and the rest 30 brands are franchised (landmarkretailgroup.com).
Landmark started its initial business as a single store in 1973 in Bahrain. It employs
55,000 people worldwide (landmarkretailgroup.com). Cross docking is an interesting concept