JSH’s use of Porter’s Value Chain and Five-Forces Model
Scenario
You are an Operations Executive for JSH Limited, and you are planning to recommend some changes to your organization's value chain process. Currently, JSH faces multiple delays in shipping orders to their customer base due to distribution errors and natural disasters, resulting in backlog orders of 90 days. With the delay in orders, customers are taking to social media outlets to complain publicly and provide poor ratings or reviews of the company and products. The CEO has requested that you pull together an assessment of the current state JSH's value chain for an upcoming meeting with the Board of Directors.
In preparation for a meeting with the Board of Directors, you have been assigned to create a Needs Analysis Summary of JSH’s value chain for the meeting. The CEO has shared with you JSH’s last value chain analysis model as a starting off point.
Value chain analysis model
Instructions
The needs analysis summary should contain a synopsis of your evaluation of JSH’s use of Porter’s Value Chain and Five-Forces Model in your value chain. The meeting will be your first interaction with the Board of Directors, so you want to ensure that the Board understands the organizational value chain management methodologies and the organization's current state.
Your needs analysis summary should:
Introduce Porter’s Value Chain and Five Forces Model
Assess JSH’s value chain performance
Assess how the global and business environment have influenced JSH’s value chain performance
Recommend the optimal strategies to maximize JSH’s value chain performance
Provide attribution for credible sources
Introduction
Porter's Value Chain and Five Forces Model are two frameworks that can be used to analyze an organization's value chain and its competitive environment.
- Porter's Value Chain is a model that breaks down an organization's activities into two categories: primary activities and support activities. Primary activities are those that directly produce or deliver the product or service to the customer. Support activities are those that provide support to the primary activities.
- Porter's Five Forces Model is a model that analyzes the competitive forces that shape an industry. These forces are:
- The threat of new entrants
- The bargaining power of buyers
- The bargaining power of suppliers
- The threat of substitute products or services
- The intensity of industry rivalry
- Distribution errors have led to delays in shipping orders to customers.
- Natural disasters have also caused disruptions to the supply chain, leading to further delays.
- Customer complaints on social media have damaged the company's reputation.
- Increased competition from global competitors.
- Changing customer demands.
- The rise of e-commerce.
- Invest in new technology to improve the efficiency of the distribution process.
- Develop a more resilient supply chain that is better able to withstand natural disasters.
- Implement a customer satisfaction program to address the concerns of customers who have experienced delays in shipping.
- Invest in marketing and sales to improve brand awareness and attract new customers.
- Porter, M.E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press.
- Porter, M.E. (1998). The Competitive Advantage of Nations. New York: Free Press.
- Hamel, G., & Prahalad, C.K. (1994). Competing for the Future. Boston: Harvard Business School Press.