Value Chain has to do with the perceived value added at every line in the marketing chain
*Value proposition: Customer involvement in creating trendy while it is still trendy.
Zara’s model makes use of the internet technology to boost the value of their product to the consumer. Instead of push selling, the way H&M still operates, Zara talks to their customers finds out what they want and need and literally creates around the information they receive in real time.
Zara’s model makes their customer free better about their purchase decisions and like assets to the company, which is what customers are.
Value proposition what makes them stand out: trendy fashion when the customer wants it
Production changes with the customer: Customer relationship management
They can get product quicker from Europe which equals = cheaper
Feedback from customers in store: done with real time PDA’s inputting information, look at customers and dialog with them to get information on trends
— Supply chain they control and the information to drive it
— Customers add the value themselves and they just honor the feedback,
–“Customers view themselves as fashion experts ” they are being treated like the experts and the loyalty will remain b/c when the customer comes back in two to three weeks there will be the product they helped design
Entire systems have to be tuned to fast turnaround of what the customer wants
· Information Product
–Database to parallel the real product base: information exists on what went out and what didn’t sell
–Non-selling items go to another store where it does well then sold off to other businesses and resold under another label
— For this customers are willing to pay higher prices
Value Customer input: they are a part of the process not the end result
They married efficiency with design
· Mange Supply chain as single organization
· Close customer relationships
o Customer segments
o Customer experience experience and relationships
· Cost control creates customer value
· Speed and agility
· Extensive metrics in real time
· Targeting global growth
Dell externalizes builds fast
Just I time process, information component and a physical component intergraded wit supplier and dell
Speed increased with location of factory and supplier house
Zara internalized the process
The next generation of added value in the value chain is the RFID technology.
RFID allows the ability for items and people to be tracked across any signal range. And not just movement but temperature, tampering, and any shifts from the norm. RFID adds value to many companies by allowing for cutbacks in production that would expire adding to a loss of profits.
It adds to efficiency:
->shorter time spent in the grocery because of one stop check out. No unloading and reloading of groceries.
->Cuts in shrinkage as items can be monitored for theft.