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Operation and Value Chain Management

In Porters value of chain, he states that there should be a seamless cooperation between the relevant departments in the company this would enable the company cut cost and be competitive in the long run if they used the value chain properly. A value chain is a process whose main activity is to offer a customer a level of value that exceeds the cost of activities which should result in a profit margin.

I would suggest to the company that they create a program which consists of cost advantage. They should reduce the cost of other activities in the individual value chain and increase the cost of others which would be beneficial to the company. They should be able to control the value chain properly in this way.

Using Porter's value chain I would suggest that the smart chips company should reorganize its supporting level of activities by outsourcing for most of the four generic categories but mainly in the technological department since this would deal with the issue of having a technical department and they would be able to buy the chip including its copyright so that the person who has sold them the technology will be bound by law and will not be able to sell the same kind of chips to anybody else.

The main infrastructure and concern for the company should be the primary activities which is the main source of the income in the company. The smart chip company should concentrate much more on the after sale services this is the activities where the company will enhance the product value including the support and repair. The after-sale service should be much more vigilant since most consumer would rather buy something they are assured of whether it is more priced than the clone other than buying clones and they are not sure of the quality or even that they will be able to get an after sale service if they have any problem.

I would really push on the sales and marketing team and also be specific on the type of product that we produce and I would also make sure that the company lives to its promise by responding to customer's query immediately especially when the smart chip is faulty. I would make sure the customer knows that our company is much more reliable and secure than the clone company.

The other management concept, which can be valuable to the company, is the operation management. According to Wikipedia, operation and business management is the area of business concerned with a production of goods and service, it also ensured that the business uses as little resources as needed while making products which is effective and meets customer requirements. If this is incorporated into the business it would lower the price of the chips hence making them be available in the competitive range of the clone chips.