How to Drive Value Your Way Essay

MGT665 Individual appointeeHOW TO DRIVE VALUE YOUR WAYSubmitted By Hiten Bachani (129278117)0MGT665 Individual Assignment Main theme The typography revolves around the migration of the assess within the supply chain as industries and technologies evolve. The basis of which can be traced d admit to the changes occurring in the patterns of consumer behaviour. But the changes in consumer patterns does not necessarily force in the apprize being shifted from one stakeholder to other rather it is strictly a function of the type of manufacture and how it has evolved over the years. Idea in Brief Argument Successful Companies do four things well trouble LessonsIn turbulent meters, profits down a tendency of migrating up or down the comfort chain, external from the realized companies to the upstream or downstream partners. eg In PC industry, quantify moved from IBM (manufacturer) to Wintel (suppliers)The trajectory is not witnessed in the Auto Industry, where the incumbent car botherrs have maintained a aeonian take of the industrys market capitalization despite terrific predictions to the contrary.1) Controlling the assets least resemblingly to be commoditized 2) Being the guarantor of tint to end customer 3) Staying in close touch with the changing customers call for 4) Balancing the imperatives of egression and strategic control of the value chainThe composition emphasis on four rules to that the companies can practice to influence whether the value migrates and if so, to where in the chain. Rule 1 Be the least changeable fake The question of who along the value chain is most replaceable fundamentally affects who can capture surplusvalue. It has been argued that the establishment integrators are most tall(prenominal) to replace in auto industry but it is not so in the PC industry. However, a company seeking to preserve or gain advantage needs not only to reinforce its own irreplaceability but also ensure that none of its suppliers amaze impossible to replace Rule 2 Become the Guardian of Quality Value in an industry mostly accrues to the player that customers associate most of the tint with the product.The quality guardian in the value chain, typically carries a disproportionate share of legal liability. Also the cost of liability differs crosswise the industries, for e.g. it is quite mellow in auto industry since the life of customers are at fortune if car crashes small-arm it is low in PC. Rule 3 conform to the Customer When the end customer changes his needs, value may shift across the value chain. Hence it becomes imperative for the companies to link the customers need to the value advise they offer. But in the absence of a fundamental shift in the end customer, incumbents will be well positioned to1MGT665 Individual Assignment manage even disruptive technologyas long as they retain ownership of distribution and can resist the emergence of pioneer standards. Rule 4 Manage the Growth Story This rule thr ows get off on type of industry such as high growth or low growth and within that how the company changes its market share. It dexterity be the case that a firm has only a minuscule market share in a violently growing orbit or a high share in a perpetual sector. When the high-growth industry in question is relatively small Incumbents will be less inclined to fight hard to preserve dominance when the unassailable profits are limited. The opposite applies, however, when the high-growth market is large. Here, scale often favours stability, because established players are large enough to maintain closed systems of suppliers, eschew generate standards, and forestall change. Methodology study The author has tried to look at the problem through the lens of auto industry and PC industry and has found contrasting differences while comparing. It has been observed that the value has hardly shifted along the value chain in case of Auto Industry while in case of PC industry it has drastic ally shifted from the exits of system integrators to the suppliers.The reason lies in the very nature of the product which both the industries sell. The paper also throws light on the methodology of how incumbents and challengers shift value across the value chain both leveraging their strength depending upon their current capabilities. Also, it dialogue about the new corporate giants like Facebook and Google who do not grapple in a sector but on the other hand shape it. This is because they focussed on the latent needs of the customers and came up with a value proposition leveraging the internet space (platform) at the pay snip making it difficult for the rivals to imitate because of the viral diffusion of the technology. Does it make sense Yes, up to a certain extent it does makes sense and there have been ample examples in the past to prove the hypothesis. Over time the customer needs have changed and successful organizations have reoriented themselves to cater to their nee ds. Also, they have been cautious to preserve their share of pie by following the rules mentioned in the text. However, the conditions diverge from industry to industry due to the different dynamics of the business scenario and the ecosystem in which they operate. It is worth noting that reputation of the player (not factored in the methodology) also plays a study role in some industries viz.Pharmaceutical industries. This may supporter the incumbents in the short run and give them a buffer time to rethink their strategies and retaliate so that the value does not move away from them. My opinion The author has done justice to his research by quoting mighty examples at the right place. One factor which has not been factored is the barrier to entering in the industry for a new player or for an vivacious player to transit from one stage to another within the value chain. Even in todays world when the technology has become very sophisticated suppliers also have a chance to conform ation economies of scale and be a crucial member in the value chain of the industry by supplying to many players. This can be achieved by standardization of components at an initial stage and then employing methodologies like SMED (Single Minute Exchange of Dies) in manufacturing industry(Automobiles) which the author had quoted as difficult in terms of replace-ability as compared to PC industry however this can be achieved given the upstream or downstream player has sufficient resources to catch the barriers of entry. 2