Lesson 3 : Value Adding- SVP Printing

Organisation structures :

different types of org structures - product, process, geographical, functional

understand the adv and disadv of each type of structure.

how and why would you recommend each org structure
- it depend on the needs of the company at a point in time.
(ie company business changes over time and the structure need to be adapted for
it to function effectively and thus improve bottom line.)

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Value Chain analysis - Michael Porter.

Basic : premise : to be profitable, a company must find its own competitive advantage.

what is competitive advantage ? - when a business can do something better (ie better design, more efficient, lower cost or have a patent) its competitor cannot.

Eg : what is one of a supermarket/hypermarket competitive advantage over neighbourhood shop :
lower priced goods (because they have volume), variety.

What is the neighbourhood shop competitive advantage over supermarket?
- hiyah - neighbours lah - location,
- relation ? - know your grandmother, mother since you were a baby (assuming the shop still around).

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In value chain analysis, each business provide a service/product- after going through a chain of activities (thus chain),
and to be profitable : each activity, need to have value add.

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What is value add :

to provide something of better value (cost, design, etc) to the customer that the customer himself/herself cannot do/provide.

Eg : if you want to buy a blouse, you can ask your grandmother(or yourself) to design and sew one for you .
or you can go to the boutique and purchase one.

You would purchase from the boutique only if it can offer you a blouse you like at a price you don't mind paying. ie better value (in cost or design) than what your grandmother can do.

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Theoretically, then :

to improve profit(increase margin), assuming the end product/service is an output of a series of activities, and we can then increase value (therefore charge higher price, assuming cost is the same) by analysing each activity, and see what value can be added or efficiency squeeze out of it.

Porter also mentioned that the activities can be categorised into
primary and supporting.

So, got the concept? , then apply it to your father business.