Sip Report

Chapter 2 Literature Review

2.1 Introduction to Advertisement

As known for decades, advertisement is one of the main strategies in marketing either a product or service. It can be defined as “An Advert that does not create a buying response, or at least produce a desire to want to know more is not an advert” (Quinn, 1985). The Table 2.1 holds the summary to the types of advertising being exercised (Aaker and Mayers, 1975).

Table 2.1: Types of Advertisement Targeted on Customers
To Inform a. Telling the market about the new product b. Suggesting new user for the product c. Informing the market of a price change d. Explaining how the product works e. Describing available service f. Building company image

To Persuade a. Building brand preference b. Encouraging switching brand c. Changing customers perception of a product attribute d. Persuading customers to purchase e. Persuading a customer to receive a sales call To Remind a. Reminding consumers that the product may be needed in near future b. Reminding them where to buy it c. Reminding how to check for quality (originality) d. Keeping in their minds during off seasons

e. Maintaining its top-of-mind awareness

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According to a research concentrating on the advertisers viewpoint, advertisement is an important tool which companies use to directly persuade buyers and public (Kotler, 1994). Being a key element in the marketing process, advertisements face many challenges in reaching the audience.

One of the main obstacles is the low audience involvement (Krugman, 1975). In most forms of communication, the audience least make some effort to pay attention or appear to be doing so. The adverts are meant for the audience to watch but unfortunately the audience is likely to take active steps in avoiding them. The advertiser therefore have problem of making loomed perhaps generally evasive audience pay attention to what is going on or at least enough to get basic selling message (Krugman, 1975). The challenge gets more difficult in a multiracial country such as Malaysia.

The existence of the advertisement rooted in Malaysia dated back to the 1971 as claimed by Bonnex (1975) in his thesis. His theory is even supported by the Honourable Minister Tan Sri Gazali’s speech in 1971(Bernama, 1971). Advertising agencies fuel the basic needs of a company to plan, strategise and introduce their product in the market. It is one of the basis of the supply chain and many advertising agencies are involved in this business in Malaysia.

2.2 Industry Background

As a preparation to start this project, background of the agency was studied to know and identify the operations involved and the key personals needed to be interviewed. Before concentrating on the agency’s background, reasonable amount of time was spent studying and understanding the advertising industry in detail to have a 10

better understanding on how the business is being done nationwide. The five main categories identified from the study are explained in the sections below.

1. Television 2. Radio 3. Print media 4. Web advertising 5. Other media

2.2.1 Television Currently there are 7 television channels in Malaysia including ASTRO and MiTV. The traditional television stations such as RTM1, RTM2 and TV3 are sharing the advertising budget with the other channels. As in Malaysia the television have towering percentage of penetration but it involves very high budget and suitable only for big companies. For example, it cost RM23340.00 (MediaBase, 2004) for just a single 60 seconds of film let (moving advertising which is not a still picture) advertisement during prime time in TV3. However, these big companies normally have their own unit for advertisement as done by Dunhill (Dunhill Tobacco). Nevertheless, most of the time, the companies make use of the service of the advertising agencies rather than having their own advertising unit since it is more cost effective. As a conclusion, the television advertisement is far reachable as it involves a high cost and is not affordable by the small and medium companies. However, it is still the most effective and popular way of reaching the customers, especially with the arrival of satellite televisions such as ATSRO. More people have tuned into the television. 11

2.2.2 Radio There are many radio channels available in Malaysia and there are even local channels for some specific states. For example, Radio Manis in Kelantan and Radio KL FM in Kuala Lumpur. This gives flexible choices for the companies to choose the coverage level they desire. For example, a catering company based in Perlis, which is situated in northern state of Malaysia, does not need to advertise in a media that can be heard in Johor that is in the southern state of Malaysia. Therefore, radio stations with different frequency and coverage level allows the companies to choose a suitable station for them. Besides that, the cost to produce the advertisement and to air-cast is lower compared to the TV channels. There are also radio channels, which have nation coverage such as the Time Highway Radio and the AI FM, which is a Chinese Network. Other than that, the radio station also allows the companies to sponsor a program from 15 minutes to 1 hour to talk freely about their product or services (MediaBase, 2004). This has received a high demand from the companies where they are able to provide more information about their products. Radio is the most widely used advertising method in Malaysia where it involves a cost effective method besides being flexible and far reaching advertising media.

2.2.3 Print Media The print media involves both magazines and newspapers in Malaysia. There are newspapers and magazines in all four major languages in Malaysia, which are English, Malay, Mandarin and Tamil. There are about 18 daily newspapers in peninsular Malaysia, 9 in Sabah and 10 in Sarawak in the year 2003 (MediaBase, 2004). This print media also involves a low budget and has a more specific target group of customers.

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The companies can advertise in this print media when they have addressed their target group of customers. The print media is also suitable when introducing a new product because the budget is smaller and can be advertised much faster compared to other advertising methods. The production is normally done in house, as there is not much complication and rules involved as in the other medias where any health claims is not allowed either in radio or television. This is due to the strict government policy to control the radio and television advertisements. This is also done to protect the consumers from manipulative advertisements. On the other hand, the print media has a very high potential coverage where more than 5.6 million Malaysian adults read daily newspaper at least once on an average day representing 54% reach of adult population in the year of 2001 (Ministry Of Information, 2002). This makes the print media one of the powerful methods of advertising.

2.2.4 Web Advertising Web advertising is a method that has been developed in the late 90’s and has been boomed with the development of the Dot.Com business. It is a wide industry with big terminologies such as Internet Marketing Service, Banner Advertisement, Link Exchange and Ezines. This huge advertising source is an industry by itself and excluded in this research, since it will widen the scope of the research. 2.2.5 Other Media This method of advertising involves the outdoor boards, transport advertising on taxis and buses, shopping complexes such as Mega Mall and in petrol stations. This method of advertising also involves having cutouts in theatres, airports and railway stations where more people pass by. These methods are normally used to remind the customers about an established product and the advertisement boards could not be 13

changed frequently. The advertisements on the boards beside the roads and highways normally involve a 6 months contract (MediaBase, 2004).

2.3 Company Background

The company chosen is an advertising agency. The agency was established in 1994 February with the minimum staff of two people whom are the managing director and the senior consultant. They have started the business in a small-scale and concentrated only on Minnal FM booking which is the Tamil Language radio dedicated for the Indian community in Malaysia.

Within the years, their business has evolved but their business activities concentrate more on the radio-based advertisements. This is due to the main reason that radio advertisement is the main method of advertisement in Malaysia and also has a broad coverage station like Minnal FM, which has a full coverage from the northern state of Perlis to the most southern state Johor.

2.4 Recent Change in Agency

There has been a dramatic change in the agency recently when they merged with another advertising agency that has been in the business for quite some time. IJS have taken over their business. Thus, they have to face some new challenges in the business since the other agency has more customers whom advertise in other media’s than the radio. They are also involved in television advertisements and the printed media, which are the newspapers and the magazines. This also makes the selected

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agency a suitable candidate in this research implementing the VCA in developing a new automated system for an advertisement agency.

In conjunction to this, the agency needs to have more new staff to oversee bookings and running the business operations. Unfortunately the agency does not have clear ideas about how the business is being done in the television and printed media monopoly. There are also some additional staff, who have been recruited in the process of maintaining their expended new business.

The agency’s new organisational structure is explained in Figure 2.1. The chart explains the employee structure in the agency after merging and the employment of the new staff. The Managing Director (MD) who is also the owner of the agency leads the management and finalises decision-making activities in the agency. MD and the consultant’s represent the agency in the meetings held by the advertising medias. They also spend most of the office time with customer relationship.

Consultants in the agency are normally involved in explaining available advertising opportunities to the customers. They also help the customers to choose the appropriate media and channel to place advertisements. Their involvement in customer relation is significant.

The experienced senior administrative staff has been working in the agency for a long period and understands the working procedures in the industry well. There are specific administrative staff that will receive booking and send it to the particular media to be air-cast. Before that, they need to confirm the booking in advance. The normal

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administrative staff’s refer to the senior administrative staff if they need any clarification in their job.

These staff spends most of their time writing out booking and typing invoices. They prepare the documentations involved in the administrative process and keep track of the cartridge number for each booking. They are also involved in preparing the payment for the artist in the advertisement production and manage the producer payment for the programs.

Managing Director

Consultant

Consultant

Senior Admin Staff

Admin Staff

Admin Staff

Admin Staff

Admin Staff

Figure 2.1: The Organisation Chart in Iklan Jaya Sakti

2.5 Description of Current System

The advertising agency currently does not have any computerised system. They have adopted the file-based system, which have many drawbacks. They record and file up all the information needed manually in everyday working environment. 16

When there is a new customer, he will be first asked whether he needs consulting service on advertisement. Some customers know the industry well while others have no idea about this advertising industry and the procedures involved. If the customer requests for consulting service, a consultant will attend to them. The customers are provided guidance on the customer’s target market and the advertising options available for them.

The consultant will then pass on the booking to the agency and administrative staff will note down the booking. Later the booking is written back in the appropriate format in the booking form and the booking is faxed to the desired number (based on the media). The staff need to include the cartridge number for both radio and television segment booking.

However the program booking is much complicated. An earlier meeting will be conducted to discuss the time and content of the program. An advertisement number will be provided if both parties agree on the terms during the meeting. This meeting will be conducted between the customers, officer from the particular channel with the attendance of one of the consultants from the advertisement agency.

This similar situation also takes place in the magazine booking. The advertisement number is important before confirming the magazine booking. This is to avoid the desired page on the particular date to be booked by someone else.

As the final step in the booking process, the administrative staff then have to type out the invoice for all the combination of booking. Invoices are solely dependent

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on the bookings that have been faxed earlier. The administrative staff also need to include the production cost for cartridge or the producer cost involved in the invoice.

2.6 Competitive Systems

These days, on shelf systems has emerged as the major business solution parallel to the fast world where they are able to see, purchase and use the system the next day. However choosing an appropriate system especially to an advertisement agency is always a challenging task. Looking close at the on shelf programs, the choices are variety, but mostly are created by foreign companies and they do not meet the criteria and requirement of the local agencies. But studying through and comparing the products gives basic guidelines for the development of the new product.

Subsequently, two widely used on shelf system and one locally developed (in Malaysia) ageing system was compared with the selected agency’s current file based system.

2.5.1 Workzone Table 2.2: Workzone Advertising System
Description a) Recently developed software using latest technology. b) Shelf ware that developed originally by an American software company. c) An ad agency extranet software. Advantage a) Speeds up the review and approval process in the business. Not only does the work move faster, it is better organised and fully documented. b) Increases customer dependence. The benefit of customer extranet solutions becomes one more reason why the customer would want to continue working the same advertising agency. This works as a customer locking mechanism. c) Takes more control of the customer management. d) Give everyone, or just someone, a view of the files. The software allows choosing who has access to a file.

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e) Complete record of what everyone says, and when they say it. f) Reduce non-billable time and increase agency income. Drawback a) Concentrates more on the cable-TV advertisement where in Malaysia ASTRO and MiTv are the only options. b) Less online support for easier assessment from other places. The customers always have to attend to the office for consultation c) Always needs an experienced consultant to advise and guide the new customers and to explain to them about the current trends and options available.

2.5.2 Fuimus Table 2.3: Fuimus Advertising System
Description a) Complete solution software. b) The production company is in the business for a long time and they understand the business well. c) Developed by a European company for the local advertisement agencies (in Europe). d) It is widely being used in the advertising agencies. Advantage a) Show prospective customers the work not presented at presentation. b) Provide more online support. Can be accessed by the authorised person from anywhere and booking can be done online. c) It is through the time / cost accounting module and resulting reports. d) Ease the process of calculating the percentage. Automatically generates a cost accounting recap after the billing is completed. e) Preparing the estimation for a production job sets the stage for total job cost control as the job progresses. f) Print media option. The Print Media Control Module is designed to be used by the media department to control print media insertion deadlines, camera-ready art deadlines and audit contract usage. Drawback a) Allow the bookings to be done outside from the organisation, which is not appropriate in Malaysia due to security reasons. b) Have unnecessary functions that are not relevant for a growing advertisement agency such as the Iklan JS. c) Measurements for the printed media follow the Europe standard, which is the effect of the international software.

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2.5.3 Bluebplez Table 2.4: Bluebplez Advertising System
Description a) Locally developed software that has been outsourced. b) Used in a local advertisement agency for the past 7 years. c) Proposed by one of the consultants to be adopted to reduce the cost and save time in development. Advantage a) Customised to meet the agency requirements. b) The language and the jargons that are being locally used in the agency have been adapted to the system. c) Keyed to a date sensitive billing cycle, which can handle essentially unlimited numbers of transactions per month. d) The employees takes much shorter time to learn and they are more keen to learn since they have been involved the in the development process. e) Its works with the employees mindset and fulfil the local requirements such as getting script approval problem. Drawback a) The development process of the system takes up to 11 months to compare to the promised 5 months where most of the employees have lost interest. b) Hard to maintain the software since it was developed with an old programming language. c) The database and the system interface were not well planned for the future adoption of changes.

2.5.4 File Based Table 2.4: File Based Advertising System
Description a) The system which is currently being used in Iklan JS is file based b) The have been using the system since the early stage of the agency since it started as a small business with minimal employee. Advantage a) It is very flexible due to the file based. b) There is no fix format so the data can be stored at the staff’s preference. c) Can be done manually and works much faster. d) The language and the jargons that are being locally used in the agency have been adapted to the system. Drawback a) Highly prone to mistakes while conducting the businesses due to the nature of the business where many sensitive data’s and numbers are

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involved. A small mistake could cause the agency big loss b) The critical information are often missed out c) Searching across information is always difficult and time-consuming process.

Besides that, few assessments and measures were identified after reading through and discussing with the people in the industry. These measures should be given heavier dosage of consideration while developing or choosing software for an advertisement agency. Advertisement agency software should be developed with the mindset that, the agency knows better how to service their customers and the software is simply a tool that helps them do it even better. Besides that, below are some basic requirements that software should meet when it will be used in a real life advertisement field.

1. Does the system support the way business is done currently? The changes introduced should be minimal. 2. Recording the customers all year advertising habit will be an advantage for future consultation and planning. 3. Will the staff want to use it? If it takes more than an hour to learn, the software is likely to have a bigger failure rate. 4. The software should use the language of advertising, the language of the advertising agency.

It should represent a custom solution that supports the unique nature of each relationship especially in advertisement booking.

2.7 System specification

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1. The system should provide a complete database to support the both administrative and operational functions of the agency. 2. The system should contain functions that will be helpful increasing the agency’s competitive advantage.

2.8 Common Attribute of Value Chain Analysis

Serving the research motives, a detailed study was carried out to have a better understanding about the value chain analysis (VCA) before continuing with this research. Following are the few definitions that were explained by few authors in their articles and in books about the VCA.

The value chain is a systematic approach in examining the development of competitive advantage. It was introduced by one of the pioneer in the ICT and business industry Porter (1980). Potter also explains the sources of cost reduction and differentiation within a firm. Potter treats every firm as a collection of activities carried out to develop, strategically market, deliver and maintain its products or services.

Potter stresses to collectively group these activities using VCA. Value chains can be understood better from the business perspective (Potter, 1985). It is the impact of transactions on value-chain activities that determines the longer-term economic benefits and strategic advantages of firms. Transactions can either optimise the collective actions of the firm or minimise its total costs in comparison to competitors.

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Other researchers have also supported this suggestion by Potter. They claim that the value chain describes the full range of activities, which are required to bring a product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various producer services), delivery to final consumers and final disposal after use (Kaplinsky and Morris, 2003).

Significant of VCA Apart from the VCA primary focus on understanding the links between the internal structure of an individual firm’s functions and activities to its company specific advantages, it can also be used to study the benefits and costs of inter-firm relationships (Porter and Fuller, 1986). Besides that, the definition of the VCA can also be discussed as ‘VCA facilitates the organisation opportunities to create a new value adding service to the customers and help them to strategise ideas on how to maximise the value. It concentrates on options whether through superb products, great services, or jobs well done.’ Manktelow (2002).

This is followed by Owens (1998) explaining that ‘Value chains have to do with integration, collaboration and synchronisation. Internally to a company we talk about integrating the supply chain functions across the enterprise. Externally we talk about collaborating with both vendors and customers. More to the point, the recognition that a firm’s competitive position is affected not only by the set of linkages within the company’s own value-chain activities, but also by the value-chain linkages between buyers and suppliers (Mattson, 1997).

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It is important that relationships are rooted in broader networks to encourage growth. In the network approach, markets are described as sets of interconnected exchange relationships between actors controlling resources for production (Johanson and Mattson, 1992). The inter-connections between firms and the emergent aspects of a network have been demonstrated by much of the research in the IMP literature (Anderson et al., 1994). Comprehensively, explains about synchronising the supply chain functions across all parties involved. The core idea of the analysis is to break and command. The strategy is to break up the chain of activities that runs from basic raw materials to end-use customers into strategically relevant segments in order to understand the behaviour of costs and the sources of differentiation (Shank and Govindarajan, 1992).

But Jacinto (2004) claims in his research paper that in reality, value chains tend to be extended to more activities within each links between different value chains, regardless of difficulties. He also explained that VCA could deepen inquiry into the disjuncture between high levels of economic integration into national and global product markets. This can be extended to countries where people actually gain from such integration (Jacinto, 2004). This makes VCA even suitable for the international projects to project its strength.

After the solid background study about the VCA, the analysis continued concentrating on more detailed study on the VCA model. Below are the VCA’s two main parts in the analysis process.

2.8.2 External Value Chain

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The external value chain concentrates on the overall value of the business and its associates. To be specific it concentrates on the key roles information played throughout the business process. The key roles in the business are evaluated based on the organisations ability to maximise their profit while minimising their cost in both production and supply (Warhoe, 2004). To have a better understanding on how the business is being carried out, the organisation should be treated as “black box” (how the business processes are carried out inside the organisation should be ignored at this stage). More importance should be given to the end customers, the external factors like suppliers, government policies and other procedures that can influence the business (Ensign, 2001). All the possibilities in each key of information should be identified clearly before proceeding to the next step. The keys should be evaluated critically, to examine how the process can be improved and how much effect they have on the business process (Ward and Peppard, 2004). This will be vital in the business reengineering process.

2.8.3 Internal Value Chain The figure 2.2 is the VCA model that has been created by Potter {Porter & Millar, 1985). Support Activities

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General Administration Human Resource Management Research, Technology and Systems Development Procurement Inbound Operations Logistics Outbound Marketing Logistics And Sales Service

Competitive Advantage

Primary Activities Figure 2.2: The Value Chain Analysis Model

This is the basic model of the VCA and it has evolved to more new specifically aimed at the new media value chain models based on different industries (Loebbecke, 2001). The model in Figure 2.3 is developed specifically to serve the need of a computerised system (Loebbecke, 2001).

Primary Activities
Inbound Logistics Operations Outbound Logistics Marketing & Sales Service

Information Technology Infrastructure

Figure 2.3: The Alternative Value Chain Analysis Model

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Analysing through the two available models, it is clear that the both models have 5 same basic criteria’s, which are better known as the primary activities (such as inbound logistics, operations, outbound logistics, marketing and sales, and service) and secondary support activities (such as purchasing, technology development, human resource management and firm infrastructure) (Clinton, 2004). These secondary support activities typically represent the principal trading interface with external partners in terms of the firm’s managerial, administrative and legal involvement with each other. The secondary operations vary between value chains. Below are the summary of primary activities and their traditional manufacturing industry explanation. 2.8.3.1 Primary Activities a. Inbound Logistics - Activities associated with receiving, storing and distributing inputs to the product. b. Operations - All activities related with transforming inputs into the final product. c. Outbound Logistics - Activities correlated with collecting, storing, and physically distributing the product or service to buyers. d. Marketing& Sales - The activities connected with purchases of products and services by end users and the inducements used to get them to make purchases. e. Service - All activities related with providing service to enhance or maintain the value of the product. - Also includes the after sales service in providing customers assistance. 2.8.3.2 Support Activities 27

Support activities in VCA models often verify with each other. This is due to the nature of the industry in which the value chain is being carried on. As for the model in the Figure 2.2, there are four main activities involved (QuickMBA, 2004). The activities are: a. General administration - Contains major activities, costs and assets relating to general management and other transparency functions in the organisation. b. Human Resources Management - Employees are an expensive but a vital resource. This topic concentrates on the activities involved in recruiting, hiring, training, development and compensation of all types of personnel; labour relations activities and development of skills. c. Research, Technology, and Systems Development - This sector deliberates the activities, calculates costs and assets relating to product research and development (R&D) process d. Procurement - The function of purchasing inputs used in the firm’s value chain, not to the purchased inputs themselves. Next will be the support activities in the model in Figure 2.3 where it has a single activity to replace all the 4 different activities in the earlier model. This activity is identified as ‘Information Technology Infrastructure’ where it contains the cost details of the hardware, software and other utility bills. Comparing the support activities in both models have revealed that the support activities mainly constrain on the cost factor. It is also a tool to evaluate if the project undertaking is financially beneficial. However the VCA model Figure 2.2 is more in detail and defines the supporting activities clearly.

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2.8.4 Value Chain Examples As a conclusion, the VCA process is a very powerful solution to the problems faced by current industries and software development companies. It is widely used in all fields of studies. Below are two different scenarios where VCA has been carried out successfully. 2.8.4.1. Small Scale Fishery (Jacinto, 2004) This research concentrates on small-scale fisheries in Philippines. Fishing is one of the primary resources in the country but it is always overwhelmed by the problems of resource degradation and extensive poverty in coastal communities. Whilst state guidelines and open access to the countries most of the main fishing spots are unable to maintain the progress of a competent fishing industry, Community Based Coastal Resources Management (CBCRM) approaches centred on property rights are popular among the fisherman and non-government institutes as both tactical necessity and strategic is vital. Even the CBCRM celebrates its second generation in the country, both success and failure stories been equal. The VCA was introduced in this situation to concentrate on the dynamic of inter-linkages in the fishing industry. It is also commenced to describe the full range of activities required to modernise fishery products from rural area’s and old methods. The research’s objective is to modernise the industry through the different phases of production and delivery to final consumers. The research stress on both cultural and logistic factors where it actually expands inquiry into the disjuncture between high levels of economic integration into national and global product markets. Implementation of VCA resulted in new value-added fishery products and marketing systems to cultivate the fisherman’s involvement in both national and global economy level. The success story of the VCA is also transparent since the research

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results computed the optimal balance between production for local food security and for the market (Jacinto, 2004). 2.8.4.2. Mobile Commerce (Barnes, 2001) Mobile commerce, which is better known as m-commerce, is the latest revamp competing with the internet facilities electronic commerce (e-commerce) Stimulated by the increasing usage and advances of mobile technology, such as phones and personal digital assistants (PDA), m-commerce gains its advantage over the e-commerce. It also allows new strategy to the way business and certain activities are conducted. New gadgets like micro-browsers and sophisticated mobile applications are the new era of technologies that brings the internet to the customer’s pocket. This opens endless possibilities including usage of m-commerce in activities such as banking, booking or buying tickets, shopping and real-time news for a start. This paper concentrates on creating a system to monitor the business-toconsumer markets and to examine how value is added in the stream of activities involved in providing m-commerce to the consumer. Besides identifying both internal and external factors that influence the m-commerce value chain, the research also develops a platform for the future strategic analysis for the industry. VCA also allows the author to identify (Barnes, 2001) some of the key factors that may influence the take-up of m-commerce, including technological issues. Adopting VCA into research to create a system also allows the author to present his predictions regarding the future of m-commerce based on the results.

2.8.5 Summary of Examples Wrapping up the discussion, VCA is commonly used in a traditional good manufacturing process. Nevertheless it is also a powerful tool that we can employ in the service-based organisation, software development companies and other industries. It is a flexible tool that has a high level of adoption to all challenges. It is also a very 30

powerful solution to the problems faced by the current industries. It is widely used from a small-scale fishery (Jacinto, 2004) to the recent research on the emerging mcommerce technology (Barnes, 2001).

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2.9 Profit Factor

However, the main key that makes VCA not an industry based analysis is the profit factor. The profit term adopted in the VCA also makes it suitable to a diversity of sectors from small business to multinational corporations. The key calculation formula (Ward & Peppered, 2004) used in the VCA to calculate is as in Figure 2.4.

Value added (V) - cost (C) = profit (P) VCPIs the value added by the improved methods The total cost occur to develop or apply the better method The measurable significant profit from the new methods

Figure 2.4: Profit Factor Formula

2.10 Natural and Contrived Value Chains

The value chain is also improved with the two new concepts called natural and contrived value chains (O’sullivan and Geringer, 1993). The business can be done more strategically with having better understanding about the role and information flow between both the internal and external value chains. New opportunities can be identified with this both new introduced theories. This theory has been further explained by Ward and Pepper (2004).

2.10.1 Natural Value Chains

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The key factor in this is “what”. It represents what have to be done to increase the value added service in the business. It is used to analyse the value chain analysis in term of the information complexity. It helps to understand the difficulties in the business process and the information flow in within and with the external factors associated with the company.

2.10.2 Contrived Value Chain The key factor in this is “how”. It examines how the business process is being carried out in the organisation. This concept concentrates on identifying new and accelerated ways to improve the information flow and business opportunities. Identifying this new value adding requirements also would allow the business reengineering process.

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