How to Drive Value Your Way
MGT665 – Individual Assignment
HOW TO DRIVE VALUE YOUR WAY
Submitted By: Hiten Bachani (129278117)
0
MGT665 – Individual Assignment Main theme The paper revolves around the migration of the value within the supply chain as industries and technologies evolve. The basis of which can be traced down to the changes occurring in the patterns of consumer behaviour. But the changes in consumer patterns does not necessarily result in the value being shifted from one stakeholder to other; rather it is purely a function of the type of industry and how it has evolved over the years. Idea in Brief Argument Successful Companies do four things well: Problem Lessons
In turbulent times, profits have a tendency of migrating up or down the value chain, away from the established companies to the upstream or downstream partners. eg: In PC industry, value moved from IBM (manufacturer) to Wintel (suppliers)
The trajectory is not witnessed in the Auto Industry, where the incumbent carmakers have maintained a constant share of the industry 's market capitalization despite dire predictions to the contrary.
1) Controlling the assets least likely to be commoditized 2) Being the guarantor of quality to end customer 3) Staying in close touch with the changing customers needs 4) Balancing the imperatives of growth and strategic control of the value chain
The paper emphasis on four rules to that the companies can practice to influence whether the value migrates – and if so, to where in the chain. Rule 1 : Be the least replaceable player The question of who along the value chain is most replaceable fundamentally affects who can capture surplus value. It has been argued that the system integrators are most difficult to replace in auto industry but it is not so in the PC industry. However, a company seeking to preserve or gain advantage needs not only to reinforce its own irreplaceability but also ensure that none of its suppliers become impossible to replace Rule 2: Become
HOW TO DRIVE VALUE YOUR WAY
Submitted By: Hiten Bachani (129278117)
0
MGT665 – Individual Assignment Main theme The paper revolves around the migration of the value within the supply chain as industries and technologies evolve. The basis of which can be traced down to the changes occurring in the patterns of consumer behaviour. But the changes in consumer patterns does not necessarily result in the value being shifted from one stakeholder to other; rather it is purely a function of the type of industry and how it has evolved over the years. Idea in Brief Argument Successful Companies do four things well: Problem Lessons
In turbulent times, profits have a tendency of migrating up or down the value chain, away from the established companies to the upstream or downstream partners. eg: In PC industry, value moved from IBM (manufacturer) to Wintel (suppliers)
The trajectory is not witnessed in the Auto Industry, where the incumbent carmakers have maintained a constant share of the industry 's market capitalization despite dire predictions to the contrary.
1) Controlling the assets least likely to be commoditized 2) Being the guarantor of quality to end customer 3) Staying in close touch with the changing customers needs 4) Balancing the imperatives of growth and strategic control of the value chain
The paper emphasis on four rules to that the companies can practice to influence whether the value migrates – and if so, to where in the chain. Rule 1 : Be the least replaceable player The question of who along the value chain is most replaceable fundamentally affects who can capture surplus value. It has been argued that the system integrators are most difficult to replace in auto industry but it is not so in the PC industry. However, a company seeking to preserve or gain advantage needs not only to reinforce its own irreplaceability but also ensure that none of its suppliers become impossible to replace Rule 2: Become