Nike’s value chain analysis shows the importance of operational activities in value creation and gaining a competitive advantage in the market. Operations include both product manufacturing and services.
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What is value chain analysis?
Value chain analysis is a means of evaluating each of the activities in a company’s value chain to understand where opportunities for improvement lie. Conducting a value chain analysis prompts you to consider how each step adds or subtracts value from your final product or service.
What is value chain analysis example?
Value Chain Analysis Example
For example, McDonald’s mission is to provide customers with low-priced food items. The analysis helps McDonald’s identify areas for improvement and activities that add value to their products and services.
What type of supply chain does Nike have?
The key principles behind Nike’s supply chain are outsourcing and diversification. Nike contracts 100% of its manufacturing for footwear and apparel out to independent suppliers. It was one of the earliest multinationals to adopt this approach.
What is Nike’s value proposition?
Value Proposition
Nike offers four primary value propositions: accessibility, innovation, customization, and brand/status. The company creates accessibility by offering a wide variety of options. It has acquired numerous footwear and apparel firms since its founding, including Converse and Hurley International.
What is the goal of value chain analysis?
A value chain analysis is a process that helps organizations understand points in their value chain, as well as relationships between these different points. Conducting a value chain analysis helps a company identify factors that create or hinder cost efficiency in its business model.
What are the steps in value chain analysis?
5) Create a diagram for documentation.
- 1) Collect the raw data and information.
- 2) Identify entities and process functions performed.
- 3) Connect the entities and functions.
- 4) Value the links in the chain.
- 5) Create a diagram for summary.
What is an example of a value chain activity?
The activities associated with this part of the value chain are providing service to enhance or maintain the value of the product after it has been sold and delivered. Examples: installation, repair, training, parts supply and product adjustment.
What are the 5 primary activities of a value chain?
The five key (primary) activities that generate higher profits include inbound logistics, operations, outbound logistics, marketing and sales, and services.
What are the benefits of value chain analysis?
Advantages of Value Chain Analysis
With value chain analysis, you can easily identify those activities where you can quickly reduce cost, optimize effort, eliminate waste, and increase profitability. Analyzing activities also gives insights into elements that bring greater value to the end user.
How can Nike improve its value chain?
Improving the Nike Supply Chain
By redesigning its logistics network, improving contact manufacturer relationships, nearshoring more facilities, and investing in automation, lead times for the Nike supply chain can be reduced from 60 days to ten days.
How does Nike produce value across the value chain?
The main goal of the business is to increase the value of doing business by exceeding the costs of running. For example, Nike’s value chain analysis shows that the company is a global brand that maximizes its profit through an efficient supply chain, inbound logistics, marketing, and operations.
Is Nike having supply chain issues?
But nearly two years into the coronavirus pandemic, supply chain issues mean the company is struggling to meet that demand and grow its business. Nike sales increased just 1% to $11.4 billion in the quarter ended November 30, the US footwear giant reported after the closing bell on Monday.
How does Nike create value for its customers?
The top personal values for Nike customers are equality, protecting all people and social justice, and tolerance and acceptance of different individuals, beliefs and behaviors. Those are values seen clearly as authentic to the Nike brand, specifically its Colin Kaepernick and women-targeted #DreamCrazy campaigns.
What strategy does Nike use?
Nike implements both value-based and premium pricing strategies to price and sell their products. Value-based pricing uses consumer perception to determine the maximum price consumers are willing to pay for their products.
What makes Nike different from its competitors?
What makes Nike unique? Core associations for Nike include: innovative technology, high quality/stylish products, joy and celebration of sports, maximum performance, self-empowerment and inspiring, locally and regionally involved, and globally responsible.
How do you analyze a value chain analysis?
Five steps to developing a value chain analysis
- Step 1: Identify all value chain activities.
- Step 2: Calculate each value chain activity’s cost.
- Step 3: Look at what your customers perceive as value.
- Step 4: Look at your competitors’ value chains.
- Step 5: Decide on a competitive advantage.
What are the features of value chain analysis?
1.2. Features of the Value Chain Approach
- A Market System Perspective.
- A Focus on End Markets.
- Understanding the Role of Value Chain Governance.
- Recognition of the Importance of Relationships.
- Factors Influencing Relationships.
- Ongoing Analysis and Learning.
What are the two main categories in a value chain analysis?
What are the two main categories in a value chain analysis? Primary value activities and support value activities.
What is the importance of the value chain process?
Value chains help increase a business’s efficiency so the business can deliver the most value for the least possible cost. The end goal of a value chain is to create a competitive advantage for a company by increasing productivity while keeping costs reasonable.
How does value chain add value to a company?
Value chain increases the efficiency of the business so that customers can receive the product with the most value-added at the lowest possible cost. The end goal of value chain management (VCM) is to create a competitive advantage for the company by increasing the overall margin.