Supply chain question

Samsung Value Chain Assignment

Samsung is a great example of a firm that derives value from various components of its value chain, both primary and support activities. The purpose of this exercise is to have you identify those specific activities and describe how, specifically Samsung is able to differentiate itself from its competitors.

INSTRUCTIONS

Using Michael Porter’s classic value chain model:

• Select two sets of business functions (procurement, operations, service, etc.) you will analyze for Samsung. Select one set of business functions from the list of Primary Activities and the other from the list of Support Activities.

• Identify whether those activities are linked into each other. Using enhanced value chain analysis determine whether those activities are downstream or upstream.

• For each business function:

1. Identify at least three specific activities that Samsung engages in.

2. Describe the unique way that Samsung engages in each activity, and

3. Identify whether this is a cost reduction or value increasing activity in the value-chain

4. Quantify and/or Explain why/how Samsung’s approach to each activity is superior to its competition. (Benchmark either against competitor or to industry avg!)

Primary Activities

• Inbound Logistics

• Operations

• Outbound Logistics

• Marketing and Sales

• Service ** (This is the one being used)

Support Activities

• Firm Infrastructure

• Human Resource Management

• Technology **(This is the support activity chosen, but you do not need to do anything with this)

• Procurement

Example:

Business Function: Human Resource Management

Activity 1: Piecework-based compensation

Explanation: Samsung pays employees for each part they produce that passes quality control. Employees are penalized for those parts that fail quality control. There is no cap on employee compensation.

Competitive Advantage: cost reduction

Explanation & Support: Samsung produces 28% more chips per employee than the industry average and has a parts defect rate of 0.01%, compared to the industry average of 0.20% (I want specific pg.#s, Exhibit #s.)