Value Chain in Entrepreneurship - Coursework Example

Competitive advantage for a business not only looks towards matching or surpassing what the competitors does, but looks towards ensuring that the different wants and customers expectations are met and even looks towards exceeding their expectations. The process of globalization has provided an opportunity for customers to search different information and accept different products and services which meet their expectations. This has thereby made it imperative that entrepreneurs look to remove the complacency and develop the required value chain which provides better opportunities of improving the manner in which different activities are taking place. This paper thereby looks to present and analyze value chain from the perspective of an entrepreneur and the manner in which different implications can be used to develop and improve the manner in which entrepreneur will look to develop their business. In addition to it the paper also evaluates the term ‘value ecosystem’ and discusses the implications for entrepreneurs as well as determines the trade off for young firms. A strategic tool which will help to measure the manner in which customer perceives the value which they get will be analyzed through the usage of value chain analysis. This will help entrepreneurs to determine the manner in which strategic advantage can be achieved and value addition can be carried out so that business is able to garner competitive advantage in the different activities which they provide (Hergert and Morris, 2009). The concept of value chain was generated by Michael Porter in (1985) which looks to bring forward the manner in which customer look to accumulate value through a series of steps and activities which ultimately leads towards the consumption of product or services. It has been described by Porter as an internal chain process which an organization looks to carry out so that different developments can be taken with regard to design, produce, market and final delivery of the goods or services to the customers (Ramsay, 2005). It has further been stated that entrepreneurs through the process of value chain is able to devise strategies which will help to implement different mechanism through which the different underlying activities can be better controlled and coordinated. Porter has further stated that value chain helps entrepreneurs to identify the manner in which different business activities are carried out and constitutes of primary and support activities. Primary activities are directly related in transforming inputs to outputs and also look to provide after sale services so that better customer satisfaction is enhanced. Secondary activities on the other hand look as different functions and process which helps to carry out the primary activities (Clemmer, 2000). This support the main activity and helps the business to develop the required parameter based on which service or product delivery takes place. The combination of both the factor helps to provide value addition through which better customer expectations are meant and helps to ensure that the process looks towards meeting the different end needs of the customers. Sherer, (2005) states that that value chain creates value for the customer through the process of looking from the basic raw materials and ends up when the good is finally consumed by the consumers. This thereby looks towards covering up the entire process which leads towards meeting the different expectations of the customers and even looks to exceed the different expectations so that better customer satisfaction can be ensured. The process looks at creating a process which aims towards value addition and helps to provide better services to the customers. It has been stated that value chain analysis starts with the value creating process of suppliers whose main work is to provide raw materials and continues a series of steps till the good or services is produced and consumed and finally the remains are recycled. Thus, it looks to cover a wide range of activities which entrepreneurs need to look at and develop strategies which will be aimed at maximizing the overall gains for people who look to consume those products and services. Entrepreneurs to ensure their long term success has to look at meeting two important need i.e. supply goods and services according to the needs and wants of customers and dealing with competition which the market environment presents. An entrepreneur competitive advantage is derived from its ability to provide more than what the customer expects and the different between what the customer perceives and the cost associated with it helps to identify the value that the entrepreneur is able to create value. The long term value of an entrepreneur is largely dependent on its ability to generate value for customer and the organization as it helps to differentiate from other players and provides an opportunity through which the long term development of the business becomes possible. Value chain thereby helps an entrepreneur to gain competitive advantage. This acts as a point of differentiation as it helps to identify the different areas based on which business looks to work. Value chain helps an entrepreneur to gain competitive advantage in two ways i.e. offering and differentiation advantage. The first one states that if the value which the customer perceives for the product is higher compared to the cost than the customer will be even willing to pay higher and would thereby help to deal with competition in a better way (Normann, and Rafael 2013). Secondly, the ability of the entrepreneur to produce the goods at a much lower cost than other players also helps to improve their value chain as customers are able to get more value for money which thereby has an impact on the value chain and determines the manner in which a customer will be able to garner different benefits from it. The concept of value chain has been slowly replaced by value ecosystem which looks towards creating a process through which value addition becomes possible. This has become one of the most important imperatives and entrepreneurs look to take their business decisions based on it. The overall impact for entrepreneurs has been such that the value ecosystem has developed based on the different fundamentals and requirements which has thereby strengthened the manner the organization works. Entrepreneurs through the process is able to generate competitive advantage as the perceived value is high compared to the cost which is involved and thereby helps to deal with competition. This has implications for the business as the ability to gain a competitive advantage and satisfy the different needs of the customer provides an entrepreneur with two options. Firstly, the entrepreneur can slowly raise the price of the product or services till the level the price offsets the perceived value which customers get. Secondly, the entrepreneur can look at having a similar price so that the perceived value for customer increases and through the same strategy the business is able to increase its market share. This thereby helps to provide an opportunity through which an entrepreneur will be able to bring about a change in the manner people look at different products and services. This will help entrepreneur to work on a similar manner and will be able to develop a niche market for its product and services so that future potential for the business increases. Proper analysis and identification of the value chain ecosystem also helps entrepreneurs to take advantage of cost and look to develop a bigger market share which will help them to gain a competitive advantage. The process of competitive advantage through value chain looks to ensure that entrepreneurs are able to adopt low price cut strategy through which they will be able to improve their market share (Steiner, 2009). This will help an entrepreneur to ensure that the product are easily accepted by people and will help them to make necessary changes at different stages so that value creation process enhances. Value chain ecosystem also helps entrepreneur to develop strategies for the future. An entrepreneur based on the value chain analysis will help to bring about a change in the manner people perceives the product and services and will be able to take decisions which improves the manner in which customer perceives different products and services. This will help the business to take important decisions and will be able to bring about a complete change in the manner in which entrepreneur look at things. The process will provide an opportunity where the entrepreneur will be able to take important business decisions and develop a business model which will be aimed towards maximizing the level of satisfaction for customers. The process will help to deal with the degree of competition and will provide an opportunity where entrepreneurs will be able to take better decisions and bring about a change in the manner people perceives different things. An important thing for entrepreneur to understand is that value chain analysis is a team effort so it will require that all the different functions work in close relation with each other so that the required changes can be made. This makes it imperative that accountants, engineering, production, marketing, distribution and sales professional work together so that improvements in value chain can be carried out and will thereby help to fill the different gaps which are present (Scherer, 2010). This will help the entrepreneurs to take appropriate strategies through which overall business development and coordination process will improve. This will also help to improve efficiency and reduce wastage which will thereby help to shape the performance and ensure better long term results for the business. Value chain analysis will help management accountants to enhance the value of the firm which will help to ensure the growth and survival of the firm. This will thereby help to develop the required strategy through which firms’ strength and competencies will be shaped up (Hax, Arnoldo and Nicolas, 2001). This will help to bring about the required change in the manner different functions work and will help the entrepreneur to work on its strength. This will also act as a point of differentiation and will provide the required scope through which overall business potential will improve. The entrepreneurs through value chain ecosystem can identify the different segments, distribution channels, price points, product differentiation, selling propositions and value chain configuration will help to identify the different area that the business needs to focus on. This will thereby provide an opportunity to work on important areas and determine the manner in which the business will be able to create a niche market for its product (Miguel & Joseph 2014). This will also help entrepreneurs to understand the core areas and develop a process through which overall wastage will be controlled. The overall process will help to bring about a change in the manner in which organization works and will ensure that they are able to deal with competition in a better way. Another important implication for the entrepreneur is that they need to understand that value chain analysis is a tool which will help them to realize the different gaps which the business has. It will provide them an understanding on core strengths and areas which need to be developed (Baggaley and Maskell. 2003). Entrepreneurs using those can bring the required change in their behaviour so that the overall process of carrying out different business activities is better coordinated and will thereby help to improve the manner in which different business decisions are taken. This tool will also help entrepreneurs to reflect on the manner different functions are carried out and will provide an opportunity to make changes so that business effectiveness multiplies (Cooper, Martha Douglas, and Pagh, 2007). This will thereby reduce wastage and provide a framework for carrying out different activities. Entrepreneur through value chain analysis can also look to understand the different sources of profitability which the business needs to work on. This will help the business to work on those and strengthen those so that the long term profitability sustains (Carr, Lawler and Shank, 2002). The process will also help to understand the not so profit making points and will help to take appropriate steps through which the overall profitability of the business can be ensured. This will help entrepreneur to work on the different areas and fundamentals through which the overall future outlook for the business will improve. The process will also help the entrepreneur to de-emphasis the different areas through which functional areas can be improved. This will bring about the required change in the manner organization looks to provide different services and products and will be able to ensure that the long term profitability is ensured (Laseter and Oliver, 2003). The process will aim towards linking the different inputs with outputs and will help to determine the manner in which the overall long term prospect of the business will be developed (Borthick, Bowen and Sullivan, 2008). This too, will thereby help the business to take very important decision and make timely changes so that they are able to sustain competition. Businesses as a result will be able to witness positive impact if the tool is used in a proper manner and will help to develop the required dimensions through which long term performance will be ensured. Organizations are stressing the use of value chain to analyze and understand the manner in which different internal functions work. The process of value chain will help entrepreneur to develop strategies for the future. An entrepreneur based on the value chain analysis will help to bring about a change in the manner people perceives the product and services and will be able to take decisions which improves the manner in which customer perceives different products and services (Walters and Rainbird, 2004). This will help the business to take important decisions and will be able to bring about a complete change in the manner in which entrepreneur look at things. The process will provide an opportunity where the entrepreneur will be able to take important business decisions and develop a business model which will be aimed towards maximizing the level of satisfaction for customers. Thus, value chain is an important tool in the hand of entrepreneurs and helps to determine the manner in which business will be able to enhance their performance in the future. Entrepreneurs by using the tool will be able to make timely changes in the manner different decisions are taken and will help to develop strategies which look to strengthen their functions. The overall parameters will thereby help to ensure that business effectiveness is improved and the manner in which different activities are carried out will be better controlled and coordinated. References Borthick, F., Bowen, P. and Sullivan, M. 2008. Controlling JIT II: Making the system monitor itself. Journal of Cost Management, Vol. 11, 33-41 Baggaley, B. and B. Maskell. 2003. Value stream management for lean companies, Part I. Journal of Cost Management, Vol. 134, 23-27 Carr, P., Lawler, W. and Shank. W. 2002. Reconfiguring the value chain: Levi's personal pair. 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