Tanksrus Manufacturing Inc. Value Channel Analysis, Coursework Example

In a competitive, environment, it is vital to success that a company analyzes its value chain. This helps to determine how effective the organization’s actions are, relative to those of its competitors[1]. This is also vital in analyzing lead actions, i.e. those that are difficult to mimic. The objective of applying this tool in realizing transaction cost economies and the creation of value throughout the chain of activities.

Primary Activities

Research and Development

TRU does not actively engage in product research and development. The company is looking to design and develop a variety of steel tank sizes, different from the existing designs and sizes.

Production

There has been recent delays in the production process due to a number of factors; delays by the company’s steel supplier, a manual costing system resulting in lack of synergies between departments.

Marketing

The company has slowly been increasing marketing expenditure, indicating increasing marketing endeavors for the company’s products.

Distribution

The company has a defined distribution channel. Distribution may be delayed as a result of bad weather or production constraints. However, terms stipulate that the company is to provide the commodities within a specified time frame.

Service

The customer care services is average inn terms of performance and efficiency. The company requires better client management through developing an online customer service portal.

Support Activities

Firm Infrastructure

The company’s organizational structure is particularly suited for the company’s operations. The structure adopted is particularly suited for company owing to the fact that there are relatively a few number of managers as well as the company’s direct style of management.

Human Resource Management

TRU’s human resource is arguably one of its greatest asset as well as a vital source of the company’s performance. The senior management team comprises of professionals from a numerous field. More importantly, TRU’s senior management team is made up of individuals with extensive knowledge and experience from numerous fields. However, the company’s currently has wages below the market levels. The high employee turnover rate is an underlying problem at the company and there is need for improved and standardized hiring practice.

Technology Development

The company has a fair use of technological development as far as customer care, marketing and sales is involved. The company website is an essential tool for these three business function. The company currently underuses the website as far as the three business functions are involved. The company has a fair understanding of the importance and use of a company website

Procurement

The company mainly uses local suppliers. Its main input, steel, is sourced from one supplier.

Customer’s Needs

TRU manages to realize solve the customer’s need through a number of ways. The website is a particularly useful tool for customer service. An online portal where clients can make and complete payment for orders. TRU’s competition has already effectively developed an online website with numerous functions such as a catalogue and an online payment solution. The company also currently has poor pay levels, below the industry average. As a result, competitors, most of which have pay levels equal or above the industry pay rate receive the employees exiting TRU.

Chain Value Weaknesses

There are a number of underlying problems within the company’s chain value. The company is particularly weak when it comes to human resource. The company has to consider handling the human resource management problem. This may potentially cause harm to the company through the exodus of employees as well as the bad image it paints on the company[2].

The company also has an underlying problem with procurement. Using a single supplier can prove to be detrimental in the long-run. This is already depicted in the manner in which the current supplier delays with some of the orders made. This is also not advisable for a company that seeks to mitigate costs[3]. In order to ensure the company received the best possible process the market has to offer.

Industry Value Chain

TRU currently has a number of opportunities and underlying threats within the industry’s value chain.

Supplier Value Chain

The company currently utilizes a single supplier. However, the existence of numerous suppliers, both internal and external, provides the company with a wide array of sources to choose from. This would allow the company to analyze market prices relative to product quality. This analysis would assist in determine the best supplier in terms of price, relative to quality.

Distribution Value Channel

The company also has a relatively small distribution value channel. However, the industry distribution value chain may realize a considerable stunt in growth and development with the introduction of new market players. Furthermore, since the oil industry formulates the larger portion of the company’s client base, the reduction in global crude oil prices could considerably affect the industry’s distribution channel. An increase in the prices of oil would cause a resultant reduction in the demand for TRU’s steel tanks.

Bibliography

Alberta Environment and Sustainable Resource Development. The global oil & gas industry : management, strategy & finance. Tulsa: Pennwell, 2011.

Angevine, Gerry. Towards North American energy security : removing barriers to oil industry development. Vancouver: Fraser Institute, 2010.

Bowhill, Bruce. Business planning and control : integrating accounting, strategy, and people. Hoboken: Wiley, 2008.

Kidnay, Arthur J, William R Parrish, and Daniel G McCartney. Fundamentals of natural gas processing. Boca Raton: CRC Press, 2011.

Wheelen, Thomas L, and David J Hunger. Strategic management and business policy : achieving sustainability. 13th. Upper Saddle River: Prentice Hall, 2011.

[1]Thomas L Wheelen and David J Hunger, Strategic management and business policy : achieving sustainability. 13^th (Upper Saddle River: Prentice Hall, 2011), 35.

[2] Bruce Bowhill, Business planning and control : integrating accounting, strategy, and people (Hoboken: Wiley, 2008), 21.

[3] Wheelen and Hunger, Strategic management and business policy : achieving sustainability, 38.