Question

Use value chain analysis to evaluate the effectiveness of primary activities (i.e., inbound logistics, operations, outbound logistics, marketing/sales and service) at Amazon Go.  How do secondary activities (i.e., technology development, human resources, general administration, and procurement) support primary activities?  

Answer 1

The value chain analysis was given by Porter. It states that a value chain represents internal and support activities. The internal activities are aimed at adding value directly to the production of the goods and services of the company. The support activities or secondary activities add value indirectly to the production. The primary activities are inbound logistics, operations, outbound logistics, marketing, sales and service. The support activities or secondary activities are technology development, human resources, general administration, and procurement. A company can gain competitive advantage in the primary and support activities.

In case of the company Amazon Go, the area of competitive advantage is the technology development. The business model is based on technology as the customers enter the store by scanning the app of Amazon Go on their mobile phone. They can pick up the items that they want to buy and there is no cash payment. The payment will be paid online or through their app. This is what differentiates Amazon Go from the other retail stores. The success of Amazon Go is directly influenced by inbound logistics, outbound logistics, marketing, sales and service. The support activities like human resources, procurement and general administration also help indirectly to ensure that the business is able to survive the competition. The proper and timely availability of goods in the store is the responsibility of the logistics department. This also involves the procurement of goods of good quality and packing them properly.