Value Chains Outsourcing and Procurement - Assignment Example

VALUE CHAINS, OUTSOURCING, AND PROCUREMENT Student’s Name Course Professor’s Name University City Date Value Chains, Outsourcing, and Procurement The value chain approach is based on the competitive advantage that aims at the creation of sustainable and superior performance in an organization. The firm considers utilization of the value addition concept under the value chain with the intention of developing sustainable competitiveness over the rival organizations in the business operations. The firms have different activities and operation systems that are linked together with the objective of improving the value chain. These operations and activities include the manufacturing of the goods, outsourcing and purchasing activities, marketing and distribution of the goods and activities (Madhani, 2015, p. 17). Value chain has been considered as the framework that providing powerful tool essential in analyzing and providing strategic planning of the organization in future. The analysis of the value chain is developed with the objective of creating the value of the organization while maintaining the same time and reducing the cost of operations. Therefore paper relates the significant approaches and aspects connecting the value chain, outsourcing and the procurement strategies that would enhance value addition and competitive advantage. Value chain analysis is a powerful tool essential in the identification of the organizational activities and performance. The value chain analysis tool helps the firm in recognizing its potential sustainability and how to achieve competitive advantage over the rival companies operating in the same industry. In achieving competitive advantage, the organization is supposed to show the ability to perform duties using the value chain and value addition better compared to the competitor (Wong, Lai, & Cheng, 2011, p. 174). The notions provided by the value chain and value addition, frameworks are important in identifying the independent systems of the organization’s operations. It is important for the organization to consider utilizing the value chain systems in repositioning its performance through achieving competitive advantage. In the value chain, the primary and support activities are essential segments that help in relating the value addition assessment in the firm’s operation. The production activities in an organization are considered as the primary activities, whereas the supportive activities provide background for efficiency, effectiveness, and development in organization’s activities. Importance of Buyer-Supplier Power to the Management Buyer- supplier connection plays the major role in the organization management in revealing the value chain and firm’s activities. The Buyer- supplier helps in addressing the value chain analysis as management can identify the activities undertaken by the organization’s operations meets the standards of the suppliers. The case study on AMI/Easton Negotiation Case Exercise focuses on aerospace hardware production, value chain, and value addition, hence providing the basis of buyer-supplier management. The buyers provide information to the suppliers of the products in the market in the respective organization (Mehta, 2016, p. 30). This information is essential as it helps the suppliers to focus ensuring the distributed products meet the standard for competitive advantage. The Buyer- supplier power is determined when they make an organization to concentrate on production operations. This is through ensuring the value addition and meeting the demand of the buyers. The supplier and buyer determine the value addition standards. The management depends on the Buyer- supplier performance to relate to the market competitiveness (Joglekar & Lévesque, 2013, p. 1324). In achieving a competitive advantage, the management through the Buyer- supplier has to consider the demand in the market. This would help in improving the value addition activities and outsourcing high-quality raw material. Therefore, the Buyer- supplier power is essential in the provision of the value chain analysis to the management. The organization depends on the buyer- supplier analysis in determining the value chain positioning. The management relates the buyer- supplier analysis to the outsourcing of essential resources and the constraints obtained in the value chain movement. The organizational activities are determined by the movement of the products and how the customers purchase the product. The suppliers engage directly to the buyers and hence understanding the essential considerations to be put in place for competitiveness (Bosch-Mauchand, Belkadi, Bricogne, & Eynard, 2013, p. 467). Furthermore, the customers provide comparative advantages of the distributed product from other competitors in the market. In sustaining the level of the competitiveness, the suppliers engage the organizational management of the essential factors and activities in the value chain analysis for value addition. The suppliers help the management in identifying the customers need to satisfy and to meet their preference and taste. The issue of the product and price leadership are also essential strategies in attracting buyers. The relation provided by the supplier concerning the quality, product and price leadership helps the management in making the appropriate decision concerning the production activities. Therefore, the buyer- supplier association has essential consideration for the organizational management in identifying the value chain positioning strategy in achieving competitive advantage. The procurement strategy is also determined and enhanced by the buyer- supplier engagement and the distribution network in the market. The organization is supposed to rely on the response and buyer- supplier network in the market to determine the movement of the products. The organizational operations activities depend on the level of the suppliers’ distribution and the movement of the product. In making procurement, the organization has to consider the movement of the product and the revenue generated from the production. The procurement of the raw material and other essential resources essential in the production, the firm relates to the rate of the market distribution and demand from the customers (Popescu & Dascălu, 2011, p. 124). The buyer- supplier play a role in helping the management of the organization to relate the market operation to the level of production. The procurement strategies are enhanced depending on the quality demanded quality raw material. Furthermore, during procurement, the value chain helps to determine the cost of production and value addition. The company is supposed to consider the cost of production in setting the market prices. The buyer- suppliers, on the other hand, provide the market price and the possible selling price to ensure the price leadership. Therefore, the procurement, value chain and value addition, as well as the buyer- supplier engagement, are essential in determining the appropriate strategy for achieving competitive advantage approach in the business. Negotiation practices and the strategies in the value chain, outsourcing and procurement are conducted depending on the analysis of buyer- supplier in the organization. The buyer- supplier association helps to determine the level at which the organization to engage in the negotiation practices and the strategies to employ in ensuring it achieve competitive advantage (Closs, Speier, & Meacham, 2011, p. 113). About the competitors, the management lays the foundation for the negotiation with the intention of setting their objectives and goals depending on the market reality. The analysis and techniques depend on the buyer- supplier framework and how the market responds to the organization’s product and services. The value chain and value addition factors contribute great aspect in the determination of the appropriate mechanism to the used by the organization. Therefore, through negotiation practices and developing appropriate strategies in the value chain and value addition, the management sets appropriate mechanism to compete effectively with other firms. The buyer- supplier association has the power through the development of the supplier relationships and alliances that guide in their operations. The connection of the buyer- supplier helps the management in relating the organization, operation and development of the strategies of the value chain and additions. The report from the buyer- supplier helps in revealing the relationship that exists between the buyer and sellers (Chakravorti, 2009, p. 206). The buyers relate to what the sellers present, and hence making a choice depending on their demands. On the other hand, the seller focuses on selling higher quality product that would attract the buyers’ attention. This relationship that exists between the buyer and supplier determines the appropriate mechanisms that are used in enhancing the value addition and value chain mechanism. The market dynamics are set by the association of the buyer- supplier as it dictates to the management of the consideration to put in place to achieve the needs of the market. In realization of the market demand, the management has to engage the buyer- supplier to determine the nature of the relationship and alliance with the buyers (Sabbaghi & Vaidyanathan, 2008, p. 77). The nature of the relationship would enhance the management decision making, strategy setting and goals and objective repositioning. The basic consideration is the realization of the appropriate mechanism that would oversee value addition and value chain operating smoothly to enhance the competitive advantage over the rival companies. The contracts and contract management in the organization are based on the procurement and outsourcing of the resources in the organization. The management engages in these processes depending on the level of the organization activities and operations. The demand of the raw material in the organization depends on the production and distribution process. The connection of the buyer- supplier to the contract and contract management depends on the organization objectives in improving the quality of the product. The management uses the information provided by the buyer and suppliers in determining the appropriate mechanisms to improve the production level and attracting more customers (Ahlstedt & Hameri, 2004, p. 42). In reality, the contracts of resources that support the organization operations are based on the buyer-suppliers outcome. Therefore, the management through the buyer-suppliers powers has the capability of assessing the procurement and outsourcing process to enhance the value chains. Outcome of Buyer-Supplier Exchange The outcome of the buyer-supplier exchange forms the basis for the organization to determine their performance in the market. The process that is undertaken through the value chain, outsourcing and procurement are determined by the effectiveness and efficiency in the buyer-supplier outcome. The management focuses on the relationship that exists between the buyer-supplier exchanges to determine the connection of the performance. In reality, it is important to consider the utility, scarcity, and information that management should use in making the informed decision (Ahlstedt & Hameri, 2004, p. 44). The organization uses the buyer-supplier outcome to gauge its operation, the competitors’ performance and the mechanisms it should put in place to improve in cost leadership and differentiation. Therefore, it is essential for the outcome of the buyer-supplier exchange to guide in the organization performance. The utility is based on the importance of the transactions that exist between the buyer and supplier outcome. The connection between the buyer and supplier are related to the quality of the production on meeting the customer's taste and preference. The organization, through the suppliers and distribution mechanism has to realize the demand of the customers (Closs, Speier, & Meacham, 2011, p. 115). The customers purchase the product depending on the achievement of their utility and how the product competes with other rival companies offering complementary or substitution of the same product. The management has to set priorities right to achieve the customer's attention and attractiveness through focusing on their taste and preferences. The outcome of the buyer-supplier helps in assessing the market situation on the basis of the utility achievement. This is through the nature of the transaction exchanges that go through the buyer-supplier association. Furthermore, it is important to relate to the customers demand with the effectiveness and efficiency of the value addition, value chain. This helps in setting the procurement, and outsourcing strategies for raw materials and cost of production are aligned to meet the price leadership and differentiation approaches (Madhani, 2015, p. 14). Therefore, the utility helps in measuring the outcome of the buyer-supplier in the market for appropriate mechanisms and strategies of the organization management. Scarcity helps in relating to the market options for the buyer-supplier focusing on the foreseeable future and the demand and supply of the products on the market. The outcome of the buyer-supplier helps in assessing the scarcity gap in the market to provide an option for the organization in improvement with the production strategy. The scarcity in the market enhances the chance for the organization to work out to fill the gap with the appropriate product. The customers through the buyer-supplier exchange provide their options of what they would require in meeting their demands. A good relationship between the buyer-supplier and the management helps in the provision of the future idea that is essential in venturing. The organization makes appropriate arrangements in outsourcing and procuring appropriate strategies and machinery to achieve the objective and goals. The connection of the buyer-supplier helps in assessing the nature of the gap, and hence due diligence is conducted in the collection of appropriate data and information to close the gap (Closs, Speier, & Meacham, 2011, p. 114). The role of the management is enhancing all the required process to ensure the scarcities in the market are completely filled using the appropriate mechanism. During the process of production and organizational activities, it is essential to focus on the value chain and value addition in aligning to the cost leadership, differentiation, and product leadership strategies. In focusing on foreseeable future, the buyer-supplier helps the management in gauging the future of the market situation. This is through gauging the demand and supply condition relating to the products coming from the competitors in the market, the organization management has the power of using the buyer-supplier to assess the market and hence formulating appropriate mechanisms and framework to improve in the supplies and distribution (Popescu & Dascălu, 2011, p. 127). During the comparison of the demand and supply conditions, the buyer-supplier outcomes provide essential information that management should follow. With these considerations, the management is in a position of using value addition, value chain to improve in the differentiation of products to improve in produce marketability. The same scenario is also essential when the firm utilizes all the mechanisms to compete effectively on the basis of improving the production and activities to achieve objectives and goals of the organization in the future. Information as an outcome of buyer-supplier helps the management in defining the extent of market scenario through monitoring the supplies. The organization has the mandate of ensuring the supplies are delivered to the customers (buyers) on time. The systems and mechanisms of distribution are essential to increase the efficiency and effectiveness. The faster the distribution of the product depending on the customer's demands, the effective mechanisms and framework of getting instant information from the buyers (Wong, Lai, & Cheng, 2011, p. 188). The organization operates depending on the feedback from the customers as they seek to consider the taste and preferences of buyers. The gathered information is essential in the value chain and value addition process in the organization production system. The management base their production of the information from the market through the buyer-supplier. The outcome of performance by the buyer-supplier provides the ground for the firm to make an analysis of the market situation, the quality of the product and services and how it would consider improving the production systems. Therefore, the information generated by the buyer-supplier plays a major role in ensuring the organization is informed of the market regarding product and production quality. Differentiation and cost leadership strategies are important in considering the market operation and performance. The outcome of buyer-supplier is considered as the major factor that advice the management of the appropriate strategy to apply in the market (Closs, Speier, & Meacham, 2011, p. 114). The value chain systems and components are based on the objective and goals set to realize the customers need. The buyer-supplier outcome provides the market analysis with what the buyer is considering the product. The firm focuses on value chain to improve on the aspects that customers consider enhancing competitive advantage. The buyer-supplier contributes in the defining the market needs and strategies that should be enhanced in the production. Conclusion The buyer-supplier relationship helps an organization in repositioning the value chain process at different degrees to achieve the market demand. The attractiveness of the product is enhanced by value addition, differentiation and cost leadership strategies. These strategies are essential in explaining the organizational structure and capabilities in achieving competitive advantage over the rival companies. In occupying attractive positions, the firm considers the outcome of buyer-supplier in changing and repositioning its operation mechanisms and frameworks. The changes are projected depending on the foreseeable future as attractive position changes are experienced over time. The buyer-supplier outcome is essential in determining the organizational operations to enhance its operations. The firms tend to operate in different zones depending on manoeuvring appropriate gaps experienced in the market. Therefore, it is essential to understand that buyer-supplier relationships are essential in determining the appropriate value chain, value addition, and outsourcing and procurement strategies in the organization. Bibliography Ahlstedt, D., & Hameri, A.-P, 2004, Review Of Supply Chain Management Research: Practical Business Value and International Aspects. Supply Chain Forum: International Journal. 5(1) , 38-48. 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