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level: W06 Global value chains

Questions and Answers List

level questions: W06 Global value chains

Question	Answer
The value chain is a set of activiteis that together from the final product/service of a firm. The goal is to create a competitive advantage by offering a greater value to the end customer and it can for instance be done by reallocating your manufacturing to a low labor cost country. Due to lower labor costs, lower prices can be set on products which increases the value for customers and creates a cost competitive advantage for the global company.	Describe the "value chain"
-Inbound logistics include functions like receiving, warehousing, and managing inventory. -Operations include procedures for converting raw materials into a finished product. -Outbound logistics include activities to distribute a final product to a consumer. -Marketing and sales include strategies to enhance visibility and target appropriate customers—such as advertising, promotion, and pricing. -Service includes programs to maintain products and enhance the consumer experience—like customer service, maintenance, repair, refund, and exchange.	What are the "primary activities" in the value chain?
-Procurement concerns how a company obtains raw materials. -Technological development is used at a firm's research and development (R&D) stage—like designing and developing manufacturing techniques and automating processes. -Human resources (HR) management involves hiring and retaining employees who will fulfill the firm's business strategy and help design, market, and sell the product. -Infrastructure includes company systems and the composition of its management team—such as planning, accounting, finance, and quality control.	What are the "support activities" in the value chain?
An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation.	What is "licensing"?
Disney - Licensing their characters to toy manufacturers, clothes or theme parks. An artist - Licensing a famous song for a movie. Microsoft - Licensing the office package to universities for the usage of the students.	Name 3 examples when a firm has licensed
Arrangement in which the firm allows another the right to use an entire business system in exchange for fees, royalties, or other compensation.	¨Franchising¨
McDonalds 7eleven Marriot KFC 17 maj hehe XD	Name 5 examples of companies that can be franchised
Michael Porter's Diamond Model (also known as the Theory of National Competitive Advantage of Industries) is a diamond-shaped framework that focuses on explaining why certain industries within a particular nation are competitive internationally, whereas others might not. It has four components.	Why is "Porters diamond model" used?
Natural resources and created factor conditions (skilled labour, scientific knowledge and infrastructure) that are specialized	What does "Factor conditions" explain in Porters diamond model?
size and sophistication of domestic demand.	What does "Demand conditions" explain in Porters diamond model?
High quality, internationally competitive suppliers and supporting industries.	What does "Related and supporting industries" explain in Porters diamond model?
Highly competitive domestic industry helps international competitiveness.	What does "Strategy, Structure & rivalry" explain in Porters diamond model?