1. Consider the "Value Chain" model by Michael Porter. Briefly describe the
model (2 marks) and then, using Ryerson University as an example, discuss how
value is achieved (5 marks). Finally, in your opinion and again referencing the
model, discuss whether or not you believe that Ryerson has a sustainable
competitive advantage (3 marks).
Porters value chain model is a connected series of activities, each of which adds value or
supports the addition of value to the firms goods or services. This model helps us
understand what businesses do to create value. The five processes that Porter describes
are: Inbound logistics, operating, outbound logistics, marking & sales, and service.
In Ryerson University value was achieved through each of the five process listed above.
Inbound logistics includes the receiving, warehousing, and inventory control or raw
materials required to create a product or service. In Ryerson, this would refer to the
investors that contribute resources into Ryerson in order to achieve a common goal.
Operations are value creating and often proprietary activities that transform the raw
inputs into the final product. In Ryerson, the operations component refers to the
management of Ryerson which performs many activities, including: building a list of
programs Ryerson will offer; hiring professors; organizing scheduling; organizing which
professor are full time or part time; deciding who will teach what subjects; etc.
Outbound logistics are the activities required to get the finished product to the customer,
including packaging, warehousing, and order fulfillment. In Ryerson, outbound logistics
refers to the quality professors which were hired, who now make lesson plans, and confirm
the high standards of the lesson plans.
Marketing and sales are all activities associated with getting the buyers to purchase the
product. Ryerson has a very strong marketing and sales approach. By having only one
location in the core of downtown Toronto, Ryerson creates value. Ryersons marketing
strategies are heavily based on their location. Ryerson is in a location which is, arguably,
the most expensive real estate in Ontario, and is not considering expanding its operations
into suburban areas, because this unique trait differentiates them.
www.notesolution.com Service activities are activities that maintain and enhance the products value, including
customer support, repair services, warranty, and recall. Ryerson has great Service and
support centers. The Ryerson website is easy to navigate around, and is full of useful
information; the website also has many email addresses that students can use for specific
inquiries. Furthermore, Ryersons call centers have flexible hours in order to assist
students with any issues or inquiries.
In conclusion, I definitely think Ryerson has sustainable competitive advantage, because it
really differentiates itself from the competition. This is demonstrated through the value
created by: their investors; management; professors; prime and easily accessible location;
and exceptional customer service. Furthermore, Ryerson is substantially cheaper than other
universities all over Ontario. For example, Ryersons masters programs are approximately
half of the price of competing universities. With such great location and cost advantage,
Ryerson does have sustainable competitive advantage.
2. Consider the use of self-service checkout counters in modern retail stores (e.g.
at Loblaws or Home Depot). How do the perspectives of automation, informating
and transformation apply? (6 marks). Further discuss how these concepts relate
to the creation of business value (4 marks).
The self checkout counters found in many retail stores use the same Transaction Processing
System that regular checkout counters use. This technological advancement has
successfully achieved automating, informating, and transforming.
Automating is achieved when repetitive, routine task are executed without human
intervention, with more speed, economy, consistency, and accuracy. The self checkout
counters have met all of these criteria. The self checkout counters have: sped up the
repetitive task of purchasing groceries; eliminated the need for cashiers which saves the
company money; and achieved high consistency and accuracy with features such as, the
scale that verifies groceries placed on it.
Informating recognizing that by having customers use self checkouts, or better yet, loyalty
point cards, companies are able to extract data from these activities. Companies are able to
see what their client base wants, in order to achieve competitive advantage.
www.notesolution.comSelf checkout counters are definitely transforming our society as a whole. Companies with
self checkout counters are likely to have faster service, with fewer lineups, giving them a
competitive advantage. Furthermore, according to Moores law, the technology of self
checkout counters is only going to improve and get cheaper which means that over time,
more companies will acquire a self-checkout system. This would truly transform society, as
many cashiers would lose their jobs. And just as netflicks is wiping out blockbuster, the
self checkout will wipe out cashiers.
Automation is going to diminish line-ups and increase speed of service. It will also reduce
operating costs for the company.
Informating will help create business value, because companies will be able to offer
clientele exactly what they want. For example, informating can gather data on which sale
products are most popular, by tracking what promotional inventory is sold the most.
Finally, companies will be able to achieve competitive advantage through differentiation,
because currently few companies are able to afford this very expensive system. It is l