Channel Strategies and the Value Chain - Assignment Example

Channel Strategies and Value Chain Channel Strategies and Value Chain Channel strategies and value chain are closely related. Channels strategies can not be viewed as different commodities from the value chain. This is because changes in channel strategies always affect the value chain either positively or negatively. A good example is that when an organization decides to reduce some of its channel strategies applied in the production process, there where be reduction in the value chain as things like raw materials levels may be reduced in the process (Charvet, Cooper & Gardner, 2008).

Therefore, the relationship between the different channel strategies and value chain within an organization is essential in improvising the advantages of the process units with a functional or operational unit. An example is that is single input is required by different organizational units, the benefits which can be obtained here will involve creating one function to purchase, store and distribute that single unit to other business units within the organization. Further, this will aid towards cost reduction processes within the organization making the role of the channel strategies indisputable within the value chain (Osterwalder, Pigneur & Tucci, 2005).

Automotive industry is affected by the effects of growth going global and supply chains. An analysis into the effects of growth going global reveals that unlike before where automotive industries would assemble their products in one place, the change towards growth going global has led to shift within the automotive industry as they now diffuse their products, services, technology and employees across national borders therefore decreasing their supply chain. When there is a reduction in the supply chain, it means a considerable reduction in the distribution strategy is realized therefore automotive industries benefits from this as their revenue is increased because of the affordability of their products to consumers.

Most automotive industries therefore obtains leverage within the channel and the value chain by opening up their sub branches in different areas to help in cutting down the costs associated with such things like transport and distribution of products therefore making their product effective in the market as prices charged on these products are always proportional to the cost incurred in the production process (McClendon & Robinson, 2013). A good example is that increased consumption of automotive products, leads to an increase in demand to order variability in the supply chain which is being amplified as it moves up the supply chain (Tang & Musa, 2011).

However, lacks of leverage on the part of the automotive industries may leads to lack of visibility which may cause excessive inventory, in accurate forecast and reduced customer service levels. The end results for the industry will be loss of revenues as customers will shift to other available products. Automotive industries before making decisions pertaining to their products like where to carry out the process or the distribution strategy to use should therefore consider certain factors like global alliances and consolidation of the industry, the diffusion of capital, technology and products, inflow of capital and outflow of their products on various markets.

This will extremely be resourceful in to them as it will aid them in making market predictions for their products (Zott, Amit, & Massa, 2011).ReferencesCharvet, F. F., Cooper, M. C., & Gardner, J. T. (2008). The intellectual structure of supply chain management: a bibliometric approach. Journal of Business Logistics, 29(1), 47-73.McClendon, S., & Robinson, A. C. (2013). Leveraging geospatially-oriented social media communications in disaster response. International Journal of Information Systems for Crisis Response and Management (IJISCRAM), 5(1), 22-40.

Osterwalder, A., Pigneur, Y., & Tucci, C. L. (2005). Clarifying business models: Origins, present, and future of the concept. Communications of the association for Information Systems, 16(1), 1.Tang, O., & Musa, S. N. (2011). Identifying risk issues and research advancements in supply chain risk management. International Journal of Production Economics, 133(1), 25-34.Zott, C., Amit, R., & Massa, L. (2011). The business model: recent developments and future research. Journal of management, 37(4), 1019-1042.