Final Ppt of Business Policy1(3)

8/8/2019 Final Ppt of Business Policy1(3)

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irtual value chain:y

NithyanandHemanth

Kalyan

ChandraAnil


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alue chainThis value chain begins with the content

,supplied by the provider which is thendistributed and supported by the information

infrastructure thereupon the context provider

.supplies actual customer interaction


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VC model treats information only as a supportingelement

irtual value chain

ut information itself can be a source of value

,An extension of the conventional value chain-where the information processing itself can.create value for customers

: ,Example dell Geffen records


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-e commerce and newspapers

Banks provide services to customers at branch office inthe marketplace as well as electronic online services to

.customers in the marketspace

Airlines sell passenger tickets

EXAMPLE


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Just as someone takes raw materialand refines it into something useful

as in the sequence of tasksinvolved in assembling anautomobile on a production line so

a manager today collectsraw

information and adds value throughthese steps.--(Rayport and Sviokla

)

REATING VALUE IN VVC


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Involves:Information

.1 Gathering info

.2 Organizing info.3 Selecting info

.4 Synthesizing info

.5

Distributing info

reating value in vvc


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1.Visibility: improve the ability totrack physical operations more

effectively2.Mirroring capability: substitute

virtual activities for physicalones

3.Create new customerrelationships: use info todeliver value to customers in

new way

-hree stages of valuedding informationalprocesses


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Visibility is where businesses co-ordinate, measureand sometimes control business processes.Over the last 30 years, information systems havebecome powerful tools in management of the physical

value chain.improve the ability to track physical operations moreeffectively.

Example: Frito-Lays info revolution initiativeInfo technology allows managers to see or trackoperations more effectively

Visibility


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Employees in field collect info on sales of products dailyand feed it to co.Field employees collect store info about sales and promoof competing and new products

Frito-Lay continuously optimizes, reducing inventory andsupplier risk, planning truck routing technology andinformation are playing a support role only when visibilityis improved.

How does Frito-Lay do it?

Visibility


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Example: Fords virtual design team

Testing of prototypes in simulatedenvironments with colleagues over a

computer network around the worldSuppliers are drawn into the design process

Mirroring capability


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Every manager knows that staying competitive today dependson achieving higher levels of performance for customers whileincurring lower costs in R & D and productionOn the VVC,companies may find dramatic low-cost approaches to deliveringextraordinarily high-value results to customers

Mirroring may move customers from the place to the spaceExample: eCommerce

Example: Online customer serviceExample: Email marketingExample: Online course registrationExample: Online surveys

Mirroring capability


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reate new customerrelationshipsBusinesses present value to the customer by new meansand in new fashions. IT creates value in the marketspace.The new relationship between business and customer isstrongly based on using IT.

:ackage trackingEstablishing sites on the World Wide Web to

advertise products or elicitcomments from customers


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It is important to note that the PVCand the VVC are distinctly different.

The physical value chain is

composed of a linear sequence ofactivities with defined points ofinput and output. By contrast, the

virtual value chain is non-linear amatrix of potential inputs andoutputs that can be accessed anddistributed through a wide varietyof channels.

Implications


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,By implementing a virtual value chain a company could:inherit the following aspects

he law of digital assets , ,Digital assets unlike physical ones are not used up

.in their consumption Companies that create value-with digital assets may be able to re harvest themthrough a potentially infinite number of

,transactions thus changing the competitive dynamics.of their industries

The variable cost of creating value using digital

information assets is zero or close to it

ew economies of scale The virtual value chain redefines economies of

,scale allowing small companies to achieve low unitcosts for products and services in markets dominated

.by big companies

ew economies of scope ,In the marketspace businesses can redefine

economies of scope by drawing on a single set ofdigital assets to provide value across many

.different and disparate markets


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-ransaction cost compression Transaction costs along the VVC are lower than their

,counterparts on the PVC and they continue to decline.sharply Lower transaction costs allow companies to

control and track information that would have beentoo costly to capture and process just a few years.ago

-e balancing supply and demand ,Taken together these four axioms combine to create

:a fifth the world of business increasingly demands- - .a shift from supply side to demand side thinking" " Companies must sense and respond to customers

desires rather than simply make and sell products.and services


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Dr. Stephen C. Hayne

Increasing Value in theChain

Supplier Value

incremental sales

speed info flow

customer statistics product feedback

channel knowledge

lead effectiveness

C u sto m e r V a lu ep rice a n d

a v a ila b ility

lo w e r tra n sa ctio ncost

/p re p o st sa le s

support

n e w p ro d u ct

kn ow le d g e

p ro d u ct in te g ra tio n

cu sto m e r le a d s


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Virtual Value Chain

In b ou n d

Lo g istics

O p e ra tio

n s

O utb ou n

d

Lo g istics

/M rktin gS a le s

S e rvice

G

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siz

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D

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P h y sica l


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Evolution of WebApplications

Public Relations (vanity?)

Product Advertising

Information Publishing

Customer Communications(discussion groups?)

Electronic Commerce (EDI/Webtransactions)

Leveraging Knowledge


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Business and the Web

No Internet = No Business (liketelephone)

Companies with poor connectivitywill resemble a 40-year-old tryingto win Wimbledon with a wooden

racket...


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Some examples


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Final Ppt of Business Policy1(3)

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