Question

a) What is the difference between a company’s internal value chain and the industry value chain? What is the relationship between vertical integration and the industry value chain?

b) What value creation activities should a company outsource to independent suppliers? What are the risks involved in outsourcing these activities?

Answer 1

Requirement 1

Company’s internal values are the group of continuing events that a company involves itself in within its manufacturing events. They are completed with the main goal of refining the final product’s excellence. Exclusivity of the product is a competitive approach that firms use to surpass its competitors. They are a sequence of events that are well planned well by the expert team of an organization to confirm that the product encounters uppermost criteria that will meet the demands of the customers. Industry value chain is a configuration of events that companies involved in same production exercises embrace so that they endure appropriate market. It intends at preparing the industry infrastructure with the essential amenities so as to safeguard that implementation of their obligations becomes an easy duty.

Vertical integration certifies that a company works together with the suppliers of its raw materials or distributors. It leads to formation of a union with wide-ranging network of goods and services until they reach the consumer. Vertical integration and industry value chain are ideas pointing at making of urgencies particularly to small businesses that have limited capital. They work towards off setting the high manufacturing costs that a firm with inadequate funds is likely to experience.

Requirement 2

Value creation activities to be outsourced comprise procuring quality funds, manufacturing parts, creating better quality production lines for competence and lower costs.