Assignment On: Value Chain Analysis of
Assignment On: Value Chain Analysis of
Assignment On: Value Chain Analysis of
On
Task 1: Value Chain Analysis of Beximco Pharmaceutical
Limited
Submitted to
Submitted by
Asif Imtiaz
Id: 19301014
Date of Submission:25/08/2021
Introduction
By conducting the Value Chain Analysis of Beximco Pharmaceuticals Limited during the
planning process, possible sources of competitive advantage can be identified. The
firm/company is a collection of different activities that share relatedness to some extent.
Beximco Pharmaceuticals Limited cannot trade all activities in the external market. The
Value Chain approach suggests that a company can consider these activities as
economic rent sources. These activities can also act as barriers to new entrants or
cause cost disadvantages to competitors.
Research Context
Beximco Pharmaceuticals Limited can identify various internal and external linkages
among activities through the value chain lens. The internal linkages are-
interrelationships between activities within same organisational units and external
linkages are between business units of same or different firms. Studying these
interrelationships can help a company take benefit from coordination and joint
optimisation.
● The improved information flow can help the company identify and exploit new
opportunities and reduce external threats. The continuous Value Chain evaluation
can result in timely filing important gaps that may affect a firm's productivity.
● The effective implementation of the Value Chain Analysis of Beximco
Pharmaceuticals Limited can improve the material and product flow due to
improved demand and sales forecasting. The inventory management also
improves as Beximco Pharmaceuticals Limited can minimise the delays by
tracking activities throughout the supply chain.
● Modern customers place high importance on quick response and convenient
access to important product related information. The unexpected interruption in
the information flow can affect the customer-supplier relationship. Beximco
Pharmaceuticals Limited Value Chain Analysis and its implementation can
highlight and remove the bottlenecks to the information flow
● The company may lose its vision and overall strategy by dividing operations into
different activities.
● Dividing the operations into primary and support activities may not be separable
due to increased complexity.
● The division process can be time consuming and finding the required information
can also be difficult.
● Effective value chain implementation does not only require familiarity but detailed
expertise.
● Beximco Pharmaceuticals Limited may find it difficult to get required information if
its Business Information System is not structured accordingly
● Primary Activities
The primary value chain activities of Beximco Pharmaceuticals Limited are directly
involved in producing and selling the product to targeted customers. Analysis of primary
value chain activities can improve the performance of Beximco Pharmaceuticals Limited
as explained below.
● Inbound Logistics
● Operations
The importance of analysing operational activities rises when raw material arrives, and
Beximco Pharmaceuticals Limited is ready to process the raw material into the end
product and launch it in the market. Some examples of operational activities are
machining, packing, assembling and testing. Equipment repair and maintenance also
falls into this category.
● Outbound Logistics
Outbound logistics include the activities that deliver the product to the customer by
passing through different intermediaries. Some outbound logistics activities are material
handling, warehousing, scheduling, order processing, transporting and delivering to the
destination. Beximco Pharmaceuticals Limited can analyse and optimise the outbound
logistics to explore competitive advantage sources and achieve its business growth
objectives.
Because, when outbound activities are timely managed with optimal costs and product
delivery processes put a minimum negative effect on the quality, it maximises the
customer satisfaction and increases growth opportunities for the firm. Beximco
Pharmaceuticals Limited should pay specific importance to its outbound value chain
activities when its offered products are perishable and require quick delivery to the end
customer.
● Marketing and Sales
At this stage, Beximco Pharmaceuticals Limited will highlight the benefits and
differentiation points of offered products to persuade the customers that its offering is
better than competitors. Only producing a high quality product at affordable costs and
distinctive features cannot create value until Beximco Pharmaceuticals Limited invests
on the marketing and sales activities. The sales agents and marketers play an important
role here.
● Services
The pre-sale and post-sale services offered by the Beximco Pharmaceuticals Limited will
play an important role in developing customer loyalty. The modern customers consider
post-sale services as important as marketing and promotional activities. The power of
negative e-WOM due to poor support service cannot be undermined in the current
technologically advanced era. The company must analyse its support activities to avoid
damaging brand reputation, and instead use it as a tool to spread positive word of mouth
due to quick, timely and efficient support services.
● Secondary Activities
The support activities play an important role in coordinating and facilitating the primary
value chain activities. Beximco Pharmaceuticals Limited can also benefit from analysis
of its support activities as explained below.
● Firm infrastructure
The firm infrastructure denotes a range of activities, such as- quality management, legal
matters handling, accounting, financing, planning and strategic management. Effective
infrastructure management can allow Beximco Pharmaceuticals Limited to optimise the
value of the whole value chain. Beximco Pharmaceuticals Limited can control the
infrastructure activities (or commonly called overhead costs) to strengthen the
competitive positioning in the market.
● Technology development
In a modern, technological advanced era, almost all value chain activities depend on
technological support. The technological integration in production, distribution, marketing
and human resource activities requires Beximco Pharmaceuticals Limited to realise the
importance of technology development. It can be divided into product and process
technological development activities. Some examples are- automation software,
technology-supported customer service, product design research and data analytics.
The research and development department of Beximco Pharmaceuticals Limited is
classified in this category.
● Procurement
The procurement in the value chain denotes the processes involved in purchasing the
inputs that may range from equipment, machinery, raw material, supplies, raw material
and other items necessary for producing the finished product. Due to its linkage with
multiple value chain activities, Beximco Pharmaceuticals Limited should carefully
consider its procurement activities to optimise the inbound, operational and outbound
value chain.
The analysis of the value chain activities can be done to understand the competitive
advantage sources. Beximco Pharmaceuticals Limited can either use the operations,
marketing and other relevant value chain activities to avail the cost advantages or it can
use the human resource, technology, infrastructure, service or other relevant activities to
set the strong differentiation basis. Broadly, the competitive advantage sources can be
grouped into two types- cost and differentiation. Beximco Pharmaceuticals Limited can
obtain a competitive advantage from one or both sources, depending on the depth and
breadth of its Value Chain Analysis. Next parts of the article present in detail how
Beximco Pharmaceuticals Limited can configure primary and/or secondary value chain
activities to achieve the desired cost and differentiation objectives.
3.Cost drivers of Beximco Pharmaceuticals Limited Value
Chain Analysis
Beximco Pharmaceuticals Limited can control following drivers to add value, set
differentiation basis and enhance efficiency.
● Organisational policies
● Integration
● Timing
● Economies of scale
● Linkages
● Interrelationships
● Capacity utilisation
● Learning and Spillover
However, it is important to note that costs can be reduced only to some extent. Beximco
Pharmaceuticals Limited Value Chain Analysis must also consider the customers’
perceived value that may justify the higher price charged by the company compared to
competitors.
The above-stated examples show how Beximco Pharmaceuticals Limited can benefit
from conducting a detailed Value Chain Analysis. However, it is also important to note
that the Porter Value Chain model application depends on the unique contextual
variables that must be considered when assigning the weightage to primary and
secondary value chain activities.