VALUE CHAIN ANALISIS

APPLE COMPUTER

BUSINESS ISSUES

GROUP MEMBERS:

MONIKA MALHOTRA JIML-10-079

DEEPTI SADHWANI JIML-10-041

DEVASHREE GAUTAM JIML-10-042

EKTA SETHI JIML-10-047

GARIMA AGARWAL JIML-10-FS-014

 INTRODUCTION

"

Man is the creator of change in this world. As such he should be above systems and structures, and not
subordinate to them."

Apple lives this vision through the technologies it develops for consumers and corporations. It strives to
make its customers masters of the products they have bought. Apple doesn't simply make a statement. It
lives it by ensuring that its employees understand the vision and strive to reach it. It has put systems in
place to enable smooth customer interaction. It has put objectives in place to continuously move
forward; implemented strategies to fulfill these objectives; and ensured that the right marketing,
financial and operational structures are in place to apply the strategies.
 INDUSTRY ANALYSIS:

External analysis using porter’s five forces model

The industry has a fast growth. Everyday new and innovative products flood the markets. From mobile
phones to laptops there is a new product advertised almost every week. The major players of the
industry are Dell, HP, Apple, Acer and Lenovo. There is a high entry barrier due to the standardization
of the PC components. If any new players wish to come into this business, they need to have a
differentiated strategy form the existing companies. Also, a high learning curve exists which means the
customers take time to get accustomed with the new product. The existing brand names make the entry
barriers high.

Bargaining power of suppliers:

Suppliers for this industry are powerful. There are only a handful of companies like Intel and Microsoft
which manufactures microprocessor and operating systems (OS). These suppliers are hard to switch due
to dominant production of such components. There is always a threat of forward integration by the
suppliers since the products manufactured by these suppliers are highly sophisticated and the other
components needed for the production of PCs are not so difficult to imitate. But there are many sources
which do provide small PC components like memory chips, disk drives and keyboards.

Threat of substitutes:

Substitutes for most of the products are easily available at a lower price. Although buyers do look for
quality and brand name, some of the components they need are purchased from these substitute
providers at a low cost. For example if a consumer cannot afford to buy an Apple iPod then he/she has
the option to buy any alternative low cost CD player or recorder from some other company. There is
high competition due to high industry growth. Manufacturers of these products try every possible
strategy to attract the attention of customers through promotion and advertising. Apple fights with its
highly innovative products whereas Dell and HP have better marketing and distribution strategies.
Rivalry:

It is almost reaching a status of mature market with intense competition but it is still growing. There are
companies which are coming up with low cost strategies to compete with the existing manufacturers and
this had led to intense rivalry. Companies like Lenovo and HP are already competing with Apple and
other companies with notebooks on the basis of cost. Also there are a wide range of MP3 players
available in the market which ranges from $30 to $499 and from 1 GB to 160GB. Also there are several
websites which give access to downloading and listening music which becomes a high threat for
products like iTunes.

Bargaining power of customers:

The type of consumers for this market can be categorized as home, small and medium sized business,
corporate, education and government. Since buyers are mostly not concentrated they have less
bargaining power for prices and models. Buyers do have a high switching cost which discourages them
from buying a similar product from another supplier. But there are a number of substitutes available
which makes buyers powerful to choose from the available options and also because they are very price
sensitive. The customers always have an advantage of choosing the electronic good according to the
need and taste. This industry has a vast customer base and companies have to be customer oriented and
should innovate according to their demand. Apple targets customers who are “techno savvy”, who look
for something unique. They have a wide range of products like computers (Mac book), iPods and iTunes
which are highly differentiated. Customers desire to buy its products as they are “icons of the digital
industry”.

Threat of new entrants:

Exit barriers for this industry are high. There is a lot of capital requirement to establish a firm inside the
electronics and PC industry. There is a chance of exit becoming almost impossible due to strategic
interrelationships between these firms. The firms depend on other firms in the industry for making a
final product ready for the customers. That is the reason why there are low entrants in this field.
 Low

Threat of
New
Entrants

Current High
Bargaining Competitor Bargaining
Low power of
s very Power of
Low Suppliers Customers High
Intense

Threat of
Substitutes
Very

High

Internal analysis through SWOT analysis

Strengths:

• Branding (Well established Brand)

• Innovation
• Differentiated product
• Integrated Product (Computers + OS)
• Ease of Use (plug & play solutions)
• Technically Elegant Products
• Superior Quality
• Colorful and Trendy
 • Marketing and Distinctive Advertising
• Retail strategy
• Customer loyalty
• Online Sales (Informative website)
• Financial Vitality (resisting market pressures to reduce costs, tightly integrating product
packages, and forming strategic alliances)

Weaknesses:

• High Priced Proprietary system

• No Customization
• Lack of Compatibility
• Cannibalization

Opportunities:
• Fast growing Industry (Customer Electronics Industry)
• Technological Innovations
• Extend new products to loyal customers
• High Potential music phone market
• Strategic Alliances with peripheral component manufacturers (speaker, home stereo, etc) and
media transmission giants (Disney, TBS, Verizon, etc).

Threats:

• Extensive Competition
• Substitute Products
• Low prices of Competitors
• Technical Advancements
• Economy downfall
INTRODUCTION OF VALUE CHAIN ANALISIS
The value chain approach was developed by Michael Porter in the1980s in his book “Competitive
Advantage: Creating and SustainingSuperior Performance” (Porter, 1985). The concept of value added,
inthe form of the value chain, can be utilized to develop anorganisation’s sustainable competitive
advantage in the business arenaof the 21st C. All organisations consist of activities that link togetherto
develop the value of the business, and together these activitiesform the organisation’s value chain. Such
activities may includepurchasing activities, manufacturing the products, distribution andmarketing of the
company’s products and activities (Lynch, 2003). Thevalue chain framework has been used as a
powerful analysis tool forthe strategic planning of an organisation for nearly two decades. Theaim of the
value chain framework is to maximise value creation whileminimising costs.
Value chain analysis is a powerful tool for managers to identify the keyactivities within the firm which
form the value chain for thatorganisation, and have the potential of a sustainable competitiveadvantage
for a company. Therein, competitive advantage of anorganisation lies in its ability to perform crucial
activities along the value chain better than its competitors.
The value chain framework of Porter is “an interdependentsystem or network of activities, connected by
linkages.When the system is managed carefully, the linkages can be a vital source ofcompetitive
advantage .The value chain analysisessentially entails the linkage of two areas. Firstly, the value
chainlinks the value of the organisations’ activities with its main functionalparts. Then the assessment of
the contribution of each part in theoverall added value of the business is made in order toconduct the
value chain analysis, the company is split into primary andsupport activities Primary activities are those
that arerelated with production, while support activities are those that providethe background necessary
for the effectiveness and efficiency of thefirm, such as human resource management. The primary and
secondaryactivities of the firm are discussed in detail below.
Primary activities
The primary activities (Porter, 1985) of the company include the following:

• Inbound logistics:-These are the activities concerned with receiving the materials fromsuppliers,
storing these externally sourced materials, and handlingthem within the firm.

• Operations:-These are the activities related to the production of products andservices. This area can
be split into more departments in certaincompanies. For example, the operations in case of a hotel
wouldinclude

reception,room service etc.

• Outbound logistics:-These are all the activities concerned with distributing the finalproduct and/or
service to the customers. For example, in case of ahotel this activity would entail the ways of bringing
customers to thehotel.

• Marketing and sales:-This functional area essentially analyses the needs and wants ofcustomers and
is responsible for creating awareness among the targetaudience of the company about the firm’s
products and services.Companies make use of marketing communications tools likeadvertising, sales
promotions etc. to attract customers to their products.

• Service: - There is often a need to provide services like pre-installation or after sales service before or
after the sale of the product or service.

Support activities
The support activities of a company include the following:

• Procurement:-This function is responsible for purchasing the materials that arenecessary for the
company’s operations. An efficient procurementdepartment should be able to obtain the highest quality
goods at thelowest prices.

• Human Resource Management:-This is a function concerned with recruiting, training, motivating

andrewarding the workforce of the company. Human resources areincreasingly becoming an important
way of attaining sustainablecompetitive advantage.

• Technology Development:-This is an area that is concerned with technological innovation,training

and knowledge that is crucial for most companies today inorder to survive.

• Firm Infrastructure: - This includes planning and control systems, such as finance accounting, and
corporate strategy etc

VALUE CHAIN ANALYSIS OF APPLE:-

The Apple pod casting value chain is comprised of nine steps that essentially move from raw content to
the listener. All the steps of the value chain include content, advertising, production, publishing,
hosting/bandwidth, promotion, searching, catching, and listening. It is important to note that each step in
the value chain adds value to the pod cast in distinctive ways, has its own sets of challenges and
opportunities.
It is important to note that the nature of value chain activities differs greatly in accordance with the types
of companies and industries. For companies with complex systems like IBM, Accentors and Cisco etc.,
it is not possible for one member of the value chain to provide all the products and services from start to
finish. The marketing function in such companies focuses on aligning with key partners and allies that
must collaborate with each other. For example, installing SAP's ERP system requires direct involvement
from companies like HP, Oracle, and Accenture, along with indirect involvement of companies like
EMC, Cisco, and Microsoft, and collaboration between many departments within the company. The
market assets contrast starkly between the companies with complex systems and those that are driven by
volume operations. For example, in case of Apple’s leading products like Macintosh and the IPod, the
entire offer is inside a package, and the entire value chain is preassembled. The change of supplier for
the Macintosh from IBM, to Intel, improved the system performance while retaining the value in terms
of price to the consumer. The only variable to manage in Apple’s case is the consumers’ preferences.
The role of creating differentiation through unique quality features, along with promotion in order to
create brand awareness, image and eventually brand equity becomes imperative for volume
operations driven Companies like Apple It is imperative to note that the value chains of companies have
undergone many changes over the last two decades, due to the rapidly changing business environment.
Information technology and the Internet have played a fundamental role in transforming certain parts
and the between parts of the value chains of companies today. Moreover HRM is increasingly
becoming a vital asset in the value chain that contributes to competitive advantage. Strategic alliances
are also becoming an integral part of the value chains. For example ,IBM once enjoyed backward
vertical integration into the disk drive industry and forward vertical integration into the consulting
services and computer software industries (Hill et al, 2007). According to the changing business
environment, IBM had more than 400 strategic alliances as of 2003 (Thompson et al, 2003). Herein, the
value chain analysis is useful in providing a framework to examine the advantages that partners can give
to each other (Pathania-Jain, 2001). It is important to note the source of competitive advantage of a
company for the value chain analysis. The competitive advantage for IBM, for example, lies in depth,
breadth and the geographic spread of its global operations (Rai, 2006) and the loyalty that the big blue
enjoys from its clientele.
Lastly, analysts should look for the managerial implications that the new era of capability outsourcing
may bring. The value chain decisions of companies will increasingly shape their organizational
structure .Furthermore these decisions will determine the types of managerial skills that companies may
need to develop to survive in an increasingly competitive business environment

Apple has been able to perfect the chain of activities in innovation. Apple starts from its new ideas of
product design, designs it through its own resources and funding, then manufactures it and finally
markets it wholeheartedly.
PRIMARY ACTIVITIES:

INBOUND LOGISTICS:

Suppliers

It is really the strongest advantage for a company to be independently manufacturing from scratch to
finished product with application and peripherals .Apple produces its own disk drives, monitors,
computer’s chassis and unique chips. The company never backward integrated in Microprocessors. In
1990s it was supplied by Motorola. Later on Apple switched to IBM and then finally to Intel (2005) for
its Core Duo microprocessors.

Technology and Product Design

This Component is the true core of Apple’s Capability. Apple contributes around 5-9% of its sales in
R&D. From being the first platform to run an electronic spreadsheet (VisiCalc on the Apple II Plus) to
the first to establish a “digital lifestyle” hub (the Macintosh product lines), Apple’s history is rich with
cutting-edge technology development. The Apple operating system is universally regarded as more
stable and reliable than Windows. The learning and innovation in technology in its products has led
Apple to leverage its expertise in iPod, iTunes and iLife suite of products. Technology Development: &
The iPhone has incentives for its partners and monetization opportunities for Apple throughout- Outside
software developers keep 70% of each sale for the products they develop Strategic Management
Analysis : Apple 29 iPhone 3G¬ Incredible business model and ecosystem ¬ Design has always been a
part of Apple’s DNA ¬D department is one of the best in today’s world- creates immense value by
introducing variants to the iPhone • Product Design

Marketing the iPhone directly to end-users, certain education customers, and resellers through online
and retail stores • Service and Distribution: ¬ Internet advertising helped in the sales of the iPhone ¬
Cleverly utilized the internet to build hype for the iPhone ¬ iPhone is assembled and distributed in
China - cheap labor • Marketing: ¬ Outsourced most manufacturing - reduces operating costs ¬Value
Chain (cont’d) • Manufacturing: & Best Buy needs to improve its brand and customer pull Strategic
Management Analysis : Apple 30 iPhone 3G¬T alliance
Production

The bundled packages of Apple-developed hardware and software became the cornerstone for its own
production process though there were situations when the company outsourced the production of iMacs
to Foxconn electronics. Apple achieved unparalleled performance via 64-bit architecture, integrated
distinctive styling with the multi-colored translucent iMac cases, and redefined intuitive operation with
the iPod. The research and development oriented products give an extraordinary performance and
products like Mac which soon became an identity of Apple Inc

OUTBOUND LOGISTICS:.

Distribution

Earlier Apple used small outlets to deal with its customers. Later in 1997, Steve job revamped the
distribution system by eliminating relationships with thousands of small outlets and expanding in
National’s presence. For the first time it also a website to directly deal with it customers. By 2001, the
online store accounted for 40% of the company’s sales. In 2001, company opened its own retail store in
Virginia. The company now owns 135 and above stores all over the world.

Marketing and Advertising

Distinctive marketing campaigns have been a strategy of Apple to attract customers and to spread the
information among them. Television commercials, Print Advertisements, Posters in Public areas and
wrap advertisement campaigns have been successful ways of outshining the new product. Apple
continues to command a market premium for producing a “better mousetrap” throughout its history.
Apple hired TBWA Chiat/day, an advertising agency that designed the campaign of “Think Different”
featuring “Albert Einstein”.

Marketing Design Build OS/UI Apps Distribution & Service Customer Sales Network Strategic
Management Analysis : Apple 28 iPhone 3G

Customer Service

Apple believes in keeping a place in customer’s heart, the customer loyalty is a great strength to the
company. The credit for such a strong relationship between the company and its customers goes to
company’s customer service and the nature of products which fulfills the need of today’s stylish
people. Apple created a virtual love affair with their customer base by delivering technically superior
products (iPods vs. other MP3 players, Macs vs. PCs, etc.), and aggressively pursuing hardware and
software updates. Apple integrated their primary activities so well that it is transparent to the consumer
where one activity begins and the other ends. A perfect example of this is Apple’s willingness to
develop software to run Windows XP on its new Intel-based iMac and then post it online free to iMac
users. In such an environment, customer service merely becomes the realization of receiving a little
more than expected.

SECONDARY ACTIVITIES:

HUMAN RESOURSE MANAGEMENT:

This case is about US-based consumer electronics company Apple, Inc's (Apple), known for its ability to come
out with path-breaking products. Experts have associated the innovation at Apple with its corporate culture.
The case discusses in detail the corporate culture at Apple. At Apple, the work culture was driven by a
passion for new products with no end to challenges and opportunities. The case discusses how Apple became
the pioneer of the "Work Hard Play Hard" ethic. The corporate culture at Apple was exemplified by its intense
work ethics. Though the work environment was relaxed and casual, there was a very strong commitment to
deadlines. Analysts summarized the work culture at Apple as "fun, yet demanding".The case talks about how
employees at Apple had to run their own show and work in a challenging and creative environment. Apple
adopted a style that was not too formal or hierarchical and a more results-driven approach which worked
best for them. The case also focuses on the career opportunities and employability security, compensation,
and benefits offered to the employees by the company. The case explains how Apple fostered a culture of
secrecy. The demand for absolute secrecy and insistence on control were infused into the company culture
right from the beginning. The various dysfunctional aspects of Apple's culture which led the company to the
brink of disaster are also discussed.

While some appreciated Apple's culture saying that it valued creative people, others felt that it was
dysfunctional from a management standpoint and was largely influenced by its CEO Steve Jobs (Jobs) who
had a very quirky style. Experts felt that Apple's obsession with maintaining secrecy could hurt the company
and its brand in the new milieu. They felt that the biggest challenge for Apple was to move out from under
the shadow of Jobs. The performance of the company in his absence was a key concern for all stakeholders,
they said. The case concludes by discussing whether a change in the company's culture is required to remain
competitiveness in the long run.

FIRM INFRASTRUCTURE
 STRATEGIES:

Vertical & horizontal integration

The company practiced horizontal & vertical integration. It designed its products from scratch, using
unique chips, disk drives, and monitors. It never backward integrated into microprocessors which were
supplied exclusively by Motorola. It also developed own Operating system and bundled it with Mac,
own application software and peripherals like printers.

Premium price strategy

Apple provided the complete desktop solutions for its customers, including hardware, software, and
peripherals that allowed customers to ‘plug and play’. On the other hand, customers found it difficult
to handle IBM’s PC. Customers were, hence, more attracted towards Apple, products. This easy to use
strategy allowed apple to sell its products at a premium price.

Offensive strategy

In 1990’s Apple planned to compete head-to-head with low priced IBM clones to become a low cost
producer of computers with mass market appeal. For this, Apple launched Mac classic and one year
later it again launched the Powerbook notebook.

Targeting price sensitive segments

Apple always offered premium price to its customer that could not be afforded by middle class
customers. For the first time, in almost a decade, Apple launched Mac Mini to target price sensitive
customers.

Differentiation strategy

Apple prides itself on its innovation. When reviewing the history of Apple, it is evident that this attitude
permeated the company during its peaks of success. For instance, Apple pioneered the PDA market by
introducing the Newton in 1993. Later, Apple introduced the easy-to-use iMac in 1998. It released a
highly stable operating system in 1999.

Apple had one of its critical points in history in 1999 when it introduced the iBook. This completed
their “product matrix”, a simplified product mix strategy formulated by Jobs. This move allowed Apple
to have a desktop and a portable computer in both the professional and the consumer segments. The
matrix is as follows:
 Professional Segment Consumer Segment

Desktop G3 iMac

Portable PowerBook iBook

In 2001, Apple hit another important historical point by launching iTunes. This marked the beginning of
Apple’s new strategy of making the Mac the hub for the “digital lifestyle”. Apple then opened its own
stores, in spite of protests by independent Apple retailers voicing cannibalization concerns. Then Apple
introduced the iPod, central to the “digital lifestyle” strategy. Philip W. Schiller, VP of Worldwide
Product Marketing for Apple, stated, “iPod is going to change the way people listen to music.” He was
right.

Apple continued their innovative streak with advancements in flat-panel LCDs for desktops in 2002 and
improved notebooks in 2003. In 2003, Apple released the iLife package, containing improved versions
of iDVD, iMovie, iPhoto, and iTunes.

Apple continued its digital lifestyle strategy by launching iTunes Music Store online in 2003, obtaining
cooperation from “The Big 5” Music companies—BMG, EMI, Sony Entertainment, Universal, Warner.
This allowed iTunes Music Store online to offer over 200,000 songs at introduction. In 2003, Apple
released the world’s fastest PC (Mac G5), which had dual 2.0GHz PowerPC G5 processors.

Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions
for product differentiation. Those that are relevant to Apple are product features, product mix, links
with other firms, and reputation. Apple established a reputation as an innovator by offering an array of
easy-to-use products that cover a broad range of segments.

Strategic alliances

Apple has a history of shunning strategic alliances. In 1987, Sculley refused to sign licensing contracts
with Apollo Computer. He felt that up-and-coming rival Sun Microsystems would overtake Apollo
Computer, which did happen. Then, Sculley and Michael Spindler (COO) partnered Apple with IBM
and Motorola on the PowerPC chip so as to leapfrog the intel based platform.
Apple and IBM also formed a joint venture, ‘Taligent’ to create revolutionary new operating system.
The two companies formed another joint venture called ‘Kaleida’ to create multimedia applications. But
the prospects for a breakthrough faded fast and Apple & IBM parted there ways.

Apple turned the corner in 1993. Spindler begrudgingly licensed the Mac to Power Computing in 1993
and to Radius (who made Mac monitors) in 1995. However, Spindler nixed Gateway in 1995 due to
cannibalization fears. Gil Amelio, an avid supporter of licensing, took over as CEO in 1996. Under
Amelio, Apple announced the $427 million purchase of NeXT Software, marking the return of Steve
Jobs as an adviser. But, market share for the software remained low and it lost $1.6billion. Amelio
resigned and job became the new CEO. Jobs despised licensing, calling cloners “leeches”. He pulled the
plug, essentially killing its largest licensee (Power Computing). Apple subsequently acquired Power
Computing customer database, Mac OS license, and key employees for $100 million of Apple stock and
$10 million to cover debt and closing costs. The business was worth $400 million.

A massive reversal occurred in 1997 and 1998. In 1997, Jobs overhauled the board of directors and then
entered Apple into patent cross-licensing and technology agreements with Microsoft. In 1998, Jobs
decided to divest significant software holdings (Claris/FileMaker and Newton). Apple continued it’s
restructuring and outsourcing. For example, company outsourced the manufacturing of iMacs to
Foxconn electronics, a Taiwan based assembler.

Finally in 2005, Apple announced its partnership with Intel and began producing two products with Intel
Core Duo chips. These ‘Intel Mac machines’ were: updated ‘iMac’, and Mcbook pro, a replacement of
Powerbook.

Other alliances of apple included, Starbucks coffee shop where the iTunes wi-fi music store is available,
Adobe that provided Mac versions of Adobe photoshop, Epson that provide driver support for Apple’s
printer and scanners, etc. There is economic value in strategic alliances. In the case of Apple, there was
the opportunity to manage risk and share costs, facilitate tacit collusion, and manage uncertainty.

Retail strategy

In 2001, Apple opened its first retail store in Virginia. By the end of 2005, it had opened 135 stores in
US, Canada, Japan and UK. Apple’s retail division resulted in 17% of its revenues. This is because
Apple now reached large no. of consumers. The store also allowed the sales people to cross sell them a
computer to go with their iPod. Many of the customers switched from windows to Mac. The sales were
high and the revenue came to $6.275billion, for a year over year increase of 27% in 2005.

STRATEGY MAP:

FINANCIAL PERSPECTIVE
After 5years of turmoil, due to the proper implementation of strategies like product differentiation,
diversification, retailing, etc, Apple finally was riding high. In the fiscal year of 2005, it posted $1.3
billion in sales and recorded an opening margin of 11.8%. its sales had grown at a compound annual rate
of 2% since 2001.

CUSTOMER PERSPECTIVE

Apple inc. has always taken care of their customers. Their user friendly software and “plug & play”
system has retained their existing customers and attracted the new ones also. Depending upon the
customer demands and needs, Apple introduced various products like iMac, iPod, computers with intel
core duo microprocessor, and the latest is iPhones. For the customers to get better access to the newly
launched products Apple adopted the retail strategy. Customers are satisfied with the products and are
loyal towards this brand even when the prices are high because they are getting quality that is worth
paying.

INTERNAL PERSPECTIVE

Internal perspective is where Apple lead others. Its terrific technology has resulted in cutting edge
performance. Around 5-9% of sales is used for R&D. Company’s efforts can be seen with the
introduction of iPods, iLife, iPhones, etc.

Along with the long term plans Apple believes in short term plans as well. It introduces new
technologies after 6months or once a new year that brings revolution in technological field. For eg.
Apple introduced Mac classic and one year later it introduced Power book notebook.

LEARNING AND GROWTH PERSPECTIVE

The company has been through many difficult phases especially the years 1993-1997. During these
years the company was losing momentum. Its sales were dropping; Apple reported $69 million loss
during 1993-1995 and $1.6 billion during 1996-1997. Apple learned from his own mistakes and for
further improvement implemented various strategies like- partnership with Intel, Adobe, Epson;
outsourcing of iMacs; retailing in US, UK, Canada & Japan; technological leapfrogging through iLife,
iTunes, iPods, etc.

CONCLUSION

The value chain framework has been used as a powerful analysis toolfor organisational strategic
 planning for nearly two decades now. Thevalue chain framework shows that the value chain of a
company maybe useful in identifying and understanding crucial aspects to achievecompetitive strengths
and core competencies in the marketplace. Themodel also reveals how the value chain activities are tied
together toultimately create value for the consumer. The five primary activitiesand four support
activities form an interdependent system that isconnected by linkages. Analysts conducting the value
chain analysisshould break down the key activities of the company according to theactivities entailed in
the framework, and assess the potential foradding value through the means of cost advantage or
differentiation.Finally, it is important to determine strategies that focus on thoseactivities that would
enable the company to attain sustainable
Analysts can explore various sources to find information necessary forconducting the value chain
analysis. Up to three years of annualreports of the company can be analysed to see how the costing of
theactivities are changing over the period and whether they are in unisonwith the competitive strategy of
the firm. These annual reports of thecompany can be compared to the annual reports of the
keycompetitors in order to see how competitive strategies differ betweenthe companies, along with
finding the difference in the contribution ofactivities To the company’s profitability.
In order to gain knowledge about the core competence of thecompany, analysts can look at the company
and competitor websites.SWOT analysis of the companies done by companies like Datamonitoretc. can
help the analyst to understand the key strengths andweaknesses of the company and how the firm differs
from itscompetitors. Furthermore, journal articles, trade publications andmagazines are useful sources of
information to identify how value is created in the particular industry in which the company operates
andwhich activities play a key role in the generation of that value.
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