Value Chain

Dollar General has taken many steps to deliver value to Its customers. The Dollar General stores compete on the basis of convenience with highly price sensitive consumers. The chain also strives for simplicity with both 10 basic-needs core SKIS categories and and even dollar price points. Simplicity, price, and convenience are of high value to a Dollar General consumer. Dollar General practices a low cost business model and each step the company makes contributes to he value delivered to the customer.

Before major transformations in the last two decades, Dollar General stores had followed a pack-away strategy to store all unsold seasonal merchandise for the following year. Since most stores only consisted of about 6,900 square feet, small back rooms piled up quickly with inventory causing overflow in some stores. Focus of managers was on how to keep the rooms organized with Irrelevant product rather than operational activities that involved staff and the customers. Managers minds ere also clouded with how to get the seasonal SKU Into the hands of the customers.

Dollar General was able to evaluate this strategy and notice that the focus on the back rooms and no room for extra Inventory could erode the value the customer receives from shopping in Dollar General. Dollar store could potentially lose space for its core category products that initially attract the consumers. In the video “Keeping the Supply Chain Moving,” a shoe store is featured in which the layout also suffered from a tiny back room. KEFIR) The owner was often unable to provide certain shoe styles to her customers due to inventory pile up in her back room.

Value is lost. In recent years Dollar General put the consumer value In front of them and made structural changes that addressed the legacy Issues (Kaufman 8). These changes were accompanied with the decision to eliminate the pack-away policy. This enabled Dollar Generals to provide fresher and more relevant merchandise. The remodeling of the strategy also contributed to effectiveness of the District Managers-They are no anger elbows deep in back room inventory with the store managers digging up Ski’s.

Now, District Managers are now able to increase in-store training and improve labor planning by simply avoiding the back room problem. Dollar General was able to protect the core SKIS value that it delivers to its consumers. By evaluating its back room policies and activities, it was able to identify the value lost with decrease in manager/employee productivity and potential to lose core SKU storage space.

Corporate governance has to be used to reposition the operations of BBC, analysis of both the micro and macro environmental points of view of the organization – where anemographic, socio-cultural, political/legal, technological and global considerations of the organization in question. It also dwells on strength, weaknesses, opportunities and threats including studying trend analysis of the organization.

Porter’s five forces model, concept of strategy groupings, resource-based view, triple bottom line reporting, value chain analysis and financial analysis would have to be examined critically so as to make BBC have a competitive advantage over its rivals. Based on the above concepts in this report, it is hereby recommended that BBC has o:open new markets and establish branches in other countries by targeting major cities and towns using same standards, quality, menu, site selection and construction. ?develop more healthy and quality foods, unique brands, always be ahead of competitors and try to use trend analysis to know the lifestyles of people, tastes, maintain its corporate social responsibility with stakeholders, look at marketing mix, develop its technological base and have a friendly atmosphere at their various cafes including motivating employees these recommendations are implemented, it is leveled that BBC will occupy more than 30% of the market share within the next few years.

1 . Introduction .

1 The aims of the report BBC can reposition its leadership edge by ensuring the management concepts remains special, opening up franchises, encourage transparencies in management practices and be proactive in terms of change and innovations. How BBC can sustain its rising profit and growth levels. 1. Objective of the report BBC can ensure consistency in their vision, mission Using SOOT, Value Chain, Porter’s Five Forces and other variables in Pander Bread Company, USA

By knockdowns formulation, implementation and corporate specialization’s the micro and micro environments of Busing Porter’s five forces model and concept of strategy groupings to make BBC have competitive advantage over their competitors. Using resource base view and value-chain analysis to identify possible opportunities and threats for BBC.

2. Background of the Company is a market leader in the restaurant industry business. Started business in 1981 with three bakery cafes and by 1997, their bakery cafes were 160 with branches in five countries and cafes in domestic airports and tools.

PC’s concept is to sell only fresh dough and no preservatives. Their mission is ‘a loaf of bread in every arm’ with 18 different products. It intends to establish Wi-If access in 2003, and has many awards in its kitty. They have a good distribution network, franchise operations, management information system and supply chain management and highly professionalisms staff. The 2004 first quarter performance showed an increase of 26% over same period in 2003 with a highly priced shares.

3. Case Study Unilateralism’s are set of actions that firms use to achieve its goal.

While strategic management focuses where an organization is at present and where it intends to be in the future. The task of analyzing a firm’s internal and external environment and selecting an appropriate strategy is known as strategy formulation. Strategy implementation involves putting appropriate controls and organization mechanisms to keep the company’s chosen strategy into action. Vision statement is the long run aspirations of the organization while mission statement means what is expected of the organization by its stakeholders.

This report focuses on micro-macro environment of BBC in order to retain their adhering role, increase market share and profitability. Resource Based View, Porters five forces model, strategic groupings, value chain, SWOT and financial analysis including triple bottom line reporting, and how these concepts would help the BBC to be a market leader would be analyses.

Macro Environmental economic factors are political, socio-cultural, environmental, economic, technological and legal.

Political consideration has to maintain its corporate governance issue by making sure that taxes are paid promptly and study government policies as it affects he business. At the moment political consideration is not really a big issue with BBC but if it intends to expand its operations, government polices of countries it wants to

Demographic forecasters that are less profitable by the organizations should be closed down and move to areas that increases profitability (Hill et al 2004).

Presently there is significant growth for young people and children who rarely cook at home and they patronize these fast casual restaurants. These youths are concerned about their health by eating healthy and quality foods which BBC should target for high reputability.

 Socio-cultural baccalaureates in the population of women in workplaces are massive and higher levels of health consciousness have created a boom to many industries (Campbell et al 2006). BBC should study population demographics, income distribution and lifestyles changes within their areas of operation to their advantage. Read about Value Chain Analysis Under Armour

EnvironmentalOperating environments have to be friendly. This should done in such a way that corporate social responsibility to communities in terms of pollution, waste disposal and environmental protection laws are adhered to Monsoons et al 005). At the moment it runs ‘Operation Dough Nation’ where all monies received and all unsold inventories goes back to the community it operates.

Economic factorials all the industries are prone to general economic conditions. High interest and exchange rates, and average disposal income can affect organizations to larger extent (Campbell et al 2006).

At the moment business is booming for BBC, therefore it has to consider business cycles, product trends, interest rates, inflation and also disposable income of consumers in order to have a competitive edge.

Technologically is now a global phenomenon in virtually every business. For a company to remain competitive it has to enhance its technological base to compete with rivals (Campbell et al 2006). BBC is expanding its technological base by introducing point of sale machines and credit cards network at each cafe©.

This helps in planning for marketing information, product mix, quicker accounting information and other variance analysis. 3. 1. Legislation et al (2005) pointed out that organizations should be cautious of health and product safeties, employment laws and legislations. Taken into account its ranches operations with other organizations, it has to make sure that organizations’ it enters into agreements comply with its standards, quality, menu, site selection and construction of cafes. The training program organized by the organization prior to franchisee starting business is applauded.

Challenges in the environment such as political and economic have created a business boom to some countries, while some have witnessed economic recession as a result of this. Government policies and changing cultural patterns by consumers have had a positive impact in some industries while some are unhappy with these effect their business especially intra-country trades where they have to convert currencies of their branch companies overseas.

SWOT Analysis’s shows the internal strengths and weaknesses of an organization from the customers’ point of view as they relate to external opportunities and threats (Hangman 2002).

Strengthener’s of organizations are the committed leadership zeal of managers, experience in the industry, clear and articulate line with external stakeholders, strong product design and commitment to consumers in the area of innovation (Lee et al 1999). The strengths or core competencies BBC has at the moment over its competitors include the product, distribution and franchising, operations, marketing mix, general managerial ability and low personnel turnover.

Handsomeness’s can be in the form of no clear management styles, poor image, research and development issue, competitive disadvantage, poor track record, insider problems, financing problems and possible training problems by managers and supervisors (Deeds et al 2007). BBC has to invest in research and development, improve its image with stakeholders and improve on its marketing strategies.

Opportunities growing demand for healthy and quality foods is an opportunity that BBC has at the moment over its competitors and it has to be sustained to make them have continuous dominant role in this industry (Stead et al 2004).

Managers of BBC should analyses competitive forces in the restaurant sector in order to identify the various opportunities in terms of product enhancement and new products, create new markets and prediction of trends.

Threats: What makes an organization to be strong is to identify possible threats within its operational base. The threats could be in the form of government policies, search, competitive pressures, new entrants, changing customers tastes, adverse demographic changes, recession, growing bargaining power of suppliers and customers (Deeds et al 2007).

BBC has to lay particular emphasis on new entrants, watch industry indicators, government adverse policies and changes in customers needs and tastes.

Resource based vitiates considers the opportunities available to a company either to add value to its products and services or look at ways of reducing costs (Deeds et al 2007). It may be possible to add value to the value chain of an organization n terms of procurement of raw materials and production processes.

The present system that BBC is using where it has signed agreement with Dawn Food Products and also having economic of scale in terms of supplies makes the pricing of their product very competitive.

Porter’s five force industry competitiveness’s five force industry competition rivalry among competitors in the same industry, the bargaining power of buyers and the threats of substitutes products. Porter argues that the stronger these forces are within an industrial setting the more limited companies raise prices and earn greater refits (Campbell 2006).

As far as this is concerned a strong competitive force can be regarded as a threat because it would drastically reduce the profit of an organization (Williamson 2004).

The threat of substitute productions within the same industrial setting are competing amongst themselves. Substitutes limits potential returns on an industry by placing a ceiling on the prices companies charge. This should be a lot of concern for BBC because there are lots of organizations offering same product in the market.

The threat of new entrant’s new entrants enter the industry they tend to cake extra effort in order to take full control of the industry. The extent to which new entrants can enter an industry exerts a significant influence on the degree to which companies may act to earn above average in terms of bottom line Monsoons et al 2005). At the moment BBC enjoys some element of economies of scale, brand recognition, access to distribution channels and experience in carrying out operational activities leading to lower cost of production.

But it is good for new entrants to enter the market because this brings about competition in the industry.

The power of presbyters are seen as competitive threats when they are in a position to demand lower prices or better service . Conversely when buyers are weak, a company can raise its prices and declare higher profits Monsoons and Schools 2002). This has to be taken into account by BBC following volume of restaurants around. BBC should recalculate its costs since it intends to increase prices by 2% to see the justification prior to embarking on it.

The power of superciliousness can be viewed as threats when they are able to force up the price for raw materials or reduce quality of materials. However, if suppliers are weak, companies can force down their prices and demand higher raw material quality. BBC believes it can have cost savings from switching to Dawn. 3. 4. Rivalry among established companies rivalry is weak this will result to increase in prices of products at the detriment of consumers and ultimately increase profits and vise versa Monsoons 2005). BBC should regularly study competitors’ moves.

Value Chain Analysis (VGA)VGA helps managers to understand how effectively and efficiently the activities of their organizations are structured and coordinated. In other words, it seeks to provide an understanding of how much value an organization’s activities add to its products and services compared to the costs of the services used in their production. This helps management to identify core activities, know if there is breakdown or blockages to their detriment (Tsar et al 2006). The distribution network of BBC is good since it uses an independent contractor that concentrate in the retail operations.

Their franchise operations should be sustained.

Strategic grotesque (1980) defined strategic (SO) groups as group of firms in the name line of business having identical strategy following through the strategic direction. Carroll et al (1992) as cited in Fluvial and Polo (1999) organizations within the same Sis often compete for market share. BBC has a lot of organizations within the same Sis, and therefore should use this to their advantage by understudying their competitors strengths and weaknesses.

Triple bottom linnet’s is the combination of social, environmental and financial reporting for an organization to its stakeholders (Deeds et al 2006). BBC does not show its report in this format, although this is optional for organizations but to enable takeovers understand PC’s business better they should incorporate this into their report like the Operation Dough Nation and the unsold inventory proceeds. 4RecommendationEncourage research for new products and branding. Explore the possibility of new branches across borders. ?Improve marketing drive to increase sales since its closing inventory in 2003 was $8066 million dollars as against $5191 million dollars in 2002. Identify threats and weaknesses through strategic grumpiness’s recovery of debts from debtors which shows $9646 million in 2003. Reduce its liabilities which gave $35,552 million dollars. ?Plan for succession incase of possible changes in leadership hierarchy.

Conclusion

Conclusion, BBC should regularly scan the micro and macro environments for signals of environmental changes or general trends that are occurring.

On observing a trend that may lead to a market changes, the company needs to monitor the change so it has a better understanding of the exact nature of the change and whether it applies to the organization. If the monitoring mechanism suggests the change is relevant, then the company needs to forecast how the change will affect its operations in future. It is then necessary to assess the forecast implications to determine whether the market change will require a change in the company’s strategy. Benchmarking, reengineering and total quality management should not be left out.

Reference

G, Limpkin, GET, Eisner, ABA 2007, ‘Strategic management’ , 3rd Eden, McGraw-Hill, New York. Buttonholer-Hemingway, Oxford. Stead, EWE, Stead, G],

Stank, M 2004 ‘Sustainable strategic management’, M. E. Sharpness. , New York. Tsar, YES, Fan, CLC, Olio, CNN, Www, CLC 2006 ‘The application of parts control and standardization by exploration of the value chain in new product development and innovation’, The Business Review, Volvo. 6, no. , up 213 (online Emerald).

Hangman, T 2002 ‘Mastering strategic management’, Palaver, New York.

Hill, COWL, Jones, GAR, Galvan, P 2004, ‘Strategic management: an integrated approach’, 5th Eden. ,John Wiley, Milton.

Johnson, G, Schools, K, Whetting, R 2005, ‘Exploring corporate strategy’, 7th Eden, Prentice Hall, Harrow.

Williamson, D, Jenkins, W, Cooke, P, Morton, KM 2004, ‘Strategic management and business analysis’, Elsevier Buttonholer-Henchman, Burlington.

Johnson, G, Schools, K 2002, ‘Exploring corporate strategy’, 6th Eden. , Prentice Hall, Harrow. Porter, ME 1980, ‘Competitive strategy’, The Free Press, New York

The model consists of knowledge infrastructure (knowledge worker acquirement, knowledge storage capacity, customer/supplier relationship and COOK and management), the process of KM (knowledge acquisition, knowledge innovation, knowledge protection, knowledge integration, and knowledge dissemination), and the interaction among those components resulting in knowledge performance. Further to the discussion of knowledge value chain (C.V.), the following viewpoint was proposed: KM guides the way a corporation performs individual knowledge activities and organizes its entire C.V..

It was suggested that competitive advantage grows out of he way corporations organize and perform discrete activities in knowledge value chain which should be measured by the core competence of corporation. This article also provides a cross-reference for e-commerce researchers and practitioners. Knowledge and knowledge management Knowledge vs. information Knowledge refers to an observer’s distinction of ‘ ‘objects” through which he brings forth from the background of experience a coherent and self-consistent set of coordinated actions (Selene, 1987).

Through the process of distinction, individual pieces of data and information become connected with one another in a network of elation. Knowledge then is contained in the overall organizational pattern of the network and not in any of the components. Knowledge is more than information. Information is data organized into meaningful patterns. Information is transformed into knowledge when a person reads, understands, interprets, and applies the information to a specific work function. Knowledge becomes visible when experienced persons put into practice lessons learned over time.

One person’s knowledge can be another person’s information. If a person cannot understand and apply the information to anything, it remains Just information. However, another individual can take that same information, understand it and interpret it in the context of previous experience, and apply the newly acquired knowledge to make business decisions or redefine a laboratory procedure. Yet a third person may take the same pieces of information, and through his unique personal experiences or lessons learned, apply knowledge in ways that the second person may never have even considered.

Information is a component part but not the whole of knowledge (Michael, 1982). Knowledge itself is a much more all-encompassing term that incorporates the concept of beliefs based on information (Dressed, 1981). It also depends on the commitment and understanding of the individual holding these beliefs, which are affected by people’s interaction and the development of judgment, behavior and attitude (Berger and Lackawanna, 1967). Journal of Management Development, Volvo. 19 NO. 9, 2000, up. 783-793. MAC university press, 0262-1711 Journal of Management Development 19,9 784 Tacit vs. explicit Tacit knowledge is that knowledge which cannot be explicated fully even by an expert and can be transferred from one person to another only through a long process of apprenticeship (Poland, 1962). Payola’s famous dictum, ‘We know more than we can ell”, points to the phenomenon in which much that constitutes human skill remains unarticulated and known only to the person who has that skill. Tacit knowledge is the skills and ‘know-how” we have inside each of us that cannot be easily shared (Limit, 1999).

In fact, both of the definitions have the same meaning. In contrast, explicit knowledge is relatively easily to articulate and communicate and, thus, transfer between individuals and organizations. Explicit knowledge resides in formulae, textbooks, or technical documents. Analogous to the tacit and explicit dichotomy, Goff (1989) sakes a distinction between embodied or action-centered, skills and intellective skills. Action-centered skills are developed through actual performance (learning by doing).

In contrast, intellective skills combine abstraction, explicit reference, and procedural reasoning, which makes them easily representatives as symbols and, therefore, easily transferable. The conceptual distinction between tacit and explicit knowledge also appears in Reed et al. ‘s (1996) discussion of causally ambiguous competencies. They describe tactics as residing in the inability of even a skilled individual to spell out explicitly the session rules and protocols that form the basis of performance. Obduracy (1991) conceives of tacit knowledge as existing in individuals or groups of individuals.

He refers to such knowledge in individuals and social groups as embedded knowledge. Similar distinctions between explicit and largely tacit knowledge in organizations have been made by Scribner’s (1986), Monika (1988), Huddled (1994), and Bonn (1994). Explicit knowledge is the knowledge that can be easily captured artificially through manuals and standard operations, and then shared with others either through Hough courses or through books for slandering. In an organization, tangible knowledge takes the form of Job procedures as well as the company’s philosophy and strategy.

Knowledge management Information is becoming ever more important in our economy, and most corporations see that knowledge can confer competitive advantage. But corporations are already flooded with information, and most of us have more of it than we can handle. Knowledge management (KM) tries to resolve the troublesome paradox (Anthem, 1998). A common definition of KM is: ‘The collection of processes that govern the creation, assimilation and leveraging of knowledge to fulfill organizational objectives”.

KM is an emerging set of organizational design and operational principles, processes, organizational structures, applications and technologies that helps knowledge workers dramatically leverage their creativity and ability to deliver business value. In fact, KM is about people and the processes they use to share information and build knowledge (Hanley, 1999). Marshall (1997) considered that KM refers to the harnessing of ‘ ‘intellectual capital” within an organization.

KM theory discusses accessing and using all information within an institution, enabling individuals to apply pertinent information to what they already know, in order to create knowledge. The theory recognizes that knowledge, not simply information, is the greatest asset to an institution. It includes the strategies and processes for identifying, capturing, sharing, and leveraging the knowledge required to survive and compete successfully into the twenty-first century (Gatchis, 1999). KM focuses on ‘doing the right thing” instead of ‘ ‘doing things right”.

In our thinking, KM is a framework within which the organization views all its processes as knowledge processes. Knowledge value chain model Differences among competitor value chains are a key source of competitive advantage. In competitive terms, value is the amount customers are willing to pay for what a corporation provides them. Value is measured by total revenue, a reflection of the price a corporation’s product commands and the units it can sell. A firm is profitable if the value it commands exceeds the costs involved in creating the product (Porter, 1985).

Creating value for customers that exceeds the cost of doing so is the goal of any competitive strategy. Value, instead of cost, must be used in analyzing nominative position since corporations often deliberately raise their cost in order to command a premium price via differentiation. Employing Porter’s value chain analysis approach, we developed a knowledge value chain model. Knowledge value chain consists of KM infrastructure and the KM process’s activities and knowledge performance. These infrastructure components and activities are the building blocks by which a corporation creates a product or provides service valuable to its customers.

Knowledge performance can be measured in two categories (van Burden, 1999). One is financial performance. However, financial assessments such as ROI are particularly difficult to make for KM activities. The other is non-financial measures including operating performance outcomes and direct measures of learning. Examples of operating performance measures include lead times, customer satisfaction, and employee productivity. Learning measures include such items as the number of participants in communities of practice, employees trained, and customers affected by the use of knowledge.

All the non-financial measures can be regarded as the reflection of core competence of corporation. The KM process’s activities are listed along the bottom of Figure 1 . In any corporation, the KM process can be divided into the five categories shown in Figure 1. KM infrastructure supports the KM process activities. The dotted lines reflect the fact that customer/supplier relationship, knowledge storage capacity, and knowledge worker recruitment can be associated with 785 786 Figure 1. Model specific KM process activities as well as support the entire chain.

COOK and management are not associated with particular KM process activities but support the entire chain. Components of KM infrastructure Knowledge worker recruitment The term knowledge worker refers to the worker who possesses competencies, knowledge, and skills in the organization such as computer engineers, accountants, etc. If a person leaves the organization, their knowledge goes with them. Knowledge is acquirable and renewable. It is the source of innovation and creativity. This is the traditional focus of many training and education programs.

In the knowledge economy, knowledge permeates through everything important В± people, products organizations. There have always been people who worked with their minds rather than their hands. In knowledge era, these are the majority of the workforce. Already, almost 60 per cent of American workers are knowledge workers. Recruiting knowledge workers in organizations is a key activity in the long term. Knowledge storage capacity Knowledge storage capacity is organizational memory and capabilities for people to store and reuse information and knowledge.

It involves the organization’s routine operations and structures that support employees’ quests for optimum intellectual performance and, therefore, overall business performance. An individual can have a high level of knowledge, but if the organization has poor systems and procedures by which to track his or her actions, the overall knowledge resource will not reach its fullest potential. Knowledge storage capacity is owned by the organization. It is retained by the organization when employees leave. There exist two organizational structures, formal and informal.

In formal organizations, people easily access explicit knowledge. Informal organizations are rich in tacit knowledge, which usually is the source of innovation. It is difficult to articulate in writing and is acquired through personal experience. It is shared by intensive face-to-face communication. To keep the costs of knowledge transfer low, angers try to turn inherently tacit knowledge into explicit knowledge. There are different approaches to implement KM, it depends on what kind of knowledge your people rely on to solve problem.

When employees rely on explicit knowledge to do their work, the people-documents approach makes the most sense. When people use tacit knowledge most often to solve problems, the person-to-person approach works best. Customer/supplier relationship Customer/supplier relationship refers to the organization’s relationships with its customers/suppliers. It might include customer/supplier loyalty for services or reduces, the purchasing/sale patterns of different customer/supplier groups, customer/supplier service reputation, warranties and undertakings by customer/ supplier, and database for customer/supplier.

The relationship between a corporation and its suppliers is very important and can be regarded as a intangible and agile asset of the corporation. It enables corporation to meet the needs of customers at a lower cost. Owning more stable and closer relationship with suppliers than its competitors means that the corporation has gained a superior competitive position over its competitors. In other words, the applier relationship is mainly for cost control purposes. Understanding better than anyone else what customers want in a product or a service is what makes someone a business leader as opposed to a follower.

Turning knowledge into new customized products and services will maximize a corporation’s market value. COOK and management As a corporation undertakes a KM program, the position of chief knowledge officer (COOK) is emerging to coordinate the KM infrastructure components and KM activities. The COOK is entrusted with the role of transforming intellectual property into a business value. In other words, The COOK is responsible for the overall knowledge assets of a company and for defining the area in which the knowledge capabilities of the organization should evolve, based on its ongoing mission and vision.

The COOK has the ultimate corporation-wide responsibility for the controlled vocabulary and knowledge directory and tackles the difficult issues associated with cross-department or cross-corporation processes that have unique knowledge-sharing requirements. The COOK also is responsible for ensuring that an appropriate technology infrastructure is in place for effective KM. The COOK has two principle design competencies: He is a technologist or environmentalist. Breadth of career experience, familiarity with his organization, and infectious enthusiasm for his mission are characteristic of the COOK. 87 788 In this research, both the COOK and management can be considered as support not only for the other three infrastructure components, but also for the entire process of Process of knowledge management As noted in Figure 1, the process of KM consists of five activities В± knowledge acquisition, integration, innovation, protection, and dissemination. Knowledge acquisition In order to do something we need to track down and analyze all the information and explicit knowledge that is available.

This will lead to beginning the process of knowledge acquisition via knowledge management infrastructure. We will discuss two processes through which organizations acquire information or knowledge: searching and organizational learning. Organizational information acquisition through searching can be viewed as occurring in three forms (Huber, 1991): (1) scanning; (2) focused search; and (3) performance monitoring. Scanning refers to the relatively wide-ranging sensing of the organization’s external environment.

Focused searching occurs when organizational members or units actively search in a narrow segment of the organization’s internal or external environment, often in response to actual or suspected problems or opportunities. Performance monitoring is used to mean both focused and withdrawing sensing of the organization’s effectiveness in fulfilling its own practicalities goals or the requirements of stakeholders. Noticing is the unintended acquisition of information about the organization’s external environment, internal conditions, or performance.

Organizational learning plays a vital role in knowledge acquisition. The need for organizations to change continuously, which was emphasized by Trucker, has long been the central concern of organizational learning theorists. Just as with individuals, organizations must always confront novel aspects of their circumstances (Cohen, 1991). It is widely agreed that learning consists of two kinds of activity. The first kind of learning is obtaining know-how in order to solve specific problems based upon existing premises.

The second kind of learning is establishing new premises (paradigms, schemata, mental models, or perspectives) to override the existing ones. These two kinds of learning have been referred to as ‘ ‘Learning l” and “Learning II” (Battens, 1972) or ‘single-loop learning” and ‘double-loop learning” (Argils and Chon, 1978). From our viewpoint, knowledge acquisition and knowledge innovation certainly involve interaction between these two kinds of learning, which forms a kind of dynamic spiral. Sense (1990) recognized that many organizations suffer from ‘learning disabilities”.

To cure the diseases and enhance the organization’s capacity to learn, he proposed the ‘ ‘learning organization” as a practical model. He argued that the learning organization has the capacity for both generative learning (I. E. Active) and adaptive learning (I. E. Passive) as the sustainable sources of competitive advantage. Knowledge innovation In a strict sense, knowledge is created only by individuals. An organization cannot create knowledge without individuals. The organization supports creative individuals or provides contexts for them to create knowledge.

Organizational knowledge innovation, therefore, should be understood as a process that ‘ ‘organizationally” amplifies the knowledge created by individuals and crystallizes it as a part of the knowledge network of the organization. There are actually three levels of knowledge- creating entities including individual, group, and organization. On the other hand, the conversion of tacit knowledge to explicit knowledge is a key process in creating new knowledge. A knowledge-innovation spiral emerges when the interaction between tacit and explicit knowledge is elevated dynamically from a lower level knowledgeableness entity to higher levels.

The assumption that knowledge is created through the interaction between tacit and explicit knowledge leads to four different modes of knowledge conversion. The four modes actually are four realizations: (1) from tacit knowledge to tacit knowledge, which is called colonization; (2) from tacit knowledge to explicit knowledge, or sterilization; (3) from explicit knowledge to explicit knowledge, or combination; and (4) from explicit knowledge to tacit knowledge, or naturalization. Knowledge protection Protection of knowledge is important because it protects creativity and the interests of knowledge-owners.

In legal systems protection of knowledge means protection of Intellectual Property Rights (PR) such as copyrights and patents, which includes revision for a right of legal action against infringes of PR and provisions detailing persons or corporations empowered to authorize the commercial use of PR and allowing the owner of PR to charge fees for such commercial uses. In a sophisticated information technology (IT) system, knowledge will be protected by filename, by surname, by password, etc. So that knowledge can be reused when it receives a request and checks against the standard file-sharing users and group table to determine what rights the user has. In addition to legal and IT protection, corporations should contract with employees guarding confidential information and their tenure in case of they 789 790 leave, and should also develop other protocols and policy guidelines which recognize and promote rights of knowledge, and then implement them by staff awareness and education campaigns.

Knowledge integration Latest advances of information technology can facilitate the processes such as acquiring and disseminating knowledge; however, the final burden is on people deciding how to translate this raw knowledge into actionable knowledge by means of an acute understanding of their business context. This is a internal knowledge integration process. Corporations have always had some process to synthesize their experience and integrate it with knowledge acquired from outside sources (e. G. Inventions, purchased patents).

A corporation acquires knowledge from years of experience in such things as manufacturing, sales, and service. This cumulative experience from different departments, together with information gathered from outside sources, can be integrated into the C.V. of the organization, which is a inter- sub-C.V. integration process, eventually being the base of KM infrastructure. Knowledge dissemination The most effective way to disseminate knowledge and best practice is through systematic transfer. That is, to create a knowledge-sharing environment.

It is no coincidence that IT has blossomed at the same time that knowledge is becoming recognized as the most valuable of a corporation’s assets. Explicit knowledge can be shared through an IT system. However, tacit knowledge is best shared through people. The more ‘valuable” the knowledge, the less sophisticated the technology that supports it. Dissemination of tacit knowledge is a social process. People must contribute knowledge to become part of a knowledge network. IT alone will not remove significant KM barriers.

IT will not change people’s behaviors, increase management’s commitment, nor create a shared understanding of its strategy or its implementation. To show its commitment for sharing knowledge, an organization should foster the employee’s willingness to share and contribute to the knowledge base. This may be the most difficult obstacle to overcome. Current performance and rewards systems exemplify an individual’s personal achievement and rarely take into account an individual’s contribution to or participation in formal collaboration efforts.

Reward structures and performance metrics need to be created which benefit those individuals who contribute to and use a shared knowledge base. Those who excel at knowledge sharing should be recognized in public forums such as newsletters and e- mails. By effective communication, the knowledge disseminated flows to the acquirers who are searching for and learning knowledge or information they need. Employees must be made to understand that the success and advancement in their career will be based on KM principles.

KM skills must be seen to be as important to career advancement as continuing education and communication skills. C.V., business value chain, and competitive strategy As the value chain itself implies, each element of activity can create value and then all the value flows to the endpoint of the business value chain and Joins together, forming the overall value of business, which is usually expressed as a margin (see Figure 2). Probing deeply, we can find that the added value comes from the competence of element activity itself, which in turn comes from specific suburb of itself.

For example, sub-C.V. in inbound logistics (IL) activity enables business to gain the inbound logistics competence, and then the added value follows. The same process occurs in other activities including operations (POP), outbound logistics (OLL), marketing and sales (MS), and service (SE). Finally, all 791 Figure 2. Relationship between business value chain and C.V. 792 the sub-Kvass are integrated together into the whole C.V.. In the process of knowledge integration, the competence of knowledge infrastructure is gradually forming. In the end, corporation competence follows C.V..

By analyzing the above, we might note that competence is after all the measurement of each sub-C.V.. That is the reason why we feel that the core competence of the corporation should be employed as the key non- uncial measure of knowledge performance. In the whole process of KM, the innovation activity fits the product differentiation strategy, which can enable corporation gains the competitive advantage, as mentioned before (see Figure 3), while reusing knowledge fits low cost strategy, by which competitive advantage gained again.

In consulting corporations, it’s Just like building with bricks: consultants reuse existing bricks while applying their skills to construct something new. The reuse of knowledge saves work, reduces communication costs, and allows a company to take on more projects. A case study of KM by Hansen et al. (1999) noted that, as a consequence, corporations such as Andersen Consulting and Ernst & Young have been able to grow at rates of 20 per cent or more in recent years. Ernst & Young worldwide consulting revenues, for example, increased from $1. Billion in 1995 to $2. 7 billion in 1997. Generally, managing knowledge assets should, like patents, trademarks and licenses, even add knowledge to the balance sheet. Conclusion and further discussion Knowledge is information plus causal links that help to make sense of this information. KM is a process that transforms information into knowledge. KM guides the way a corporation performs individual knowledge activities and organizes its entire knowledge value chain.

It is suggested that competitive advantage grows out of the way corporations organize and perform discrete activities in the knowledge value chain, which should be measured by the core competence of the corporation. In the end, we would raise another assumption for further discussion, so that for KM to ‘ ‘open the black box” of a corporation and examine its intricate details. We assumed that the corporation should be treated more or less as a box of tricks reducing the predictable outputs of knowledge-based products and services from specific inputs of information or/and knowledge.

A value chain is used to identify key areas of a corporation, including their resources and what they may achieve. The value chain is made up of key primary and secondary activities, which differentiate a business from others and creates a competitive advantage. The primary activities include inbound logistics, operations, outbound logistics, marketing/sales, and services. Secondary activities are made up of the firm infrastructure, human resource management, and technology and production development.

Starbucks inbound logistics, which is receiving and distributing raw materials, is that its coffee beans are sourced from Latin America, the Pacific Rim, and East Africa. This gives them a diversity of flavors to offer the customers. They also hold strong relationships with their suppliers and buyers, creating an upper hand for receiving and selling Starbucks coffee. Operations is the actual process of creating the final product, in Starbucks case, this would be the coffee bean itself. Starbucks tried different ways to roast coffee before coming up with the perfect solution.

Outbound logistics is concerned with distributing the final product to consumers. Starbucks has an in depth supply chain operation ensuring the coffee beans are kept fresh when being delivered to retail stores, wholesalers, grocery stores and through mail order. Starbucks uses Encore, a direct mailing system, to deliver coffee to consumers not located near a store. Marketing and sales is a major key in increasing the value of Starbucks, it identifies what the customers want and gets the word out about the brand. They key concern for Starbucks marketing is their brand equity.

In the past it was based on retail equity, creating an enjoyable environment, but now they are looking to focus on the brand bringing joyous moments as a whole. Lastly, Starbucks focuses on the service offered, ensuring customer support and satisfaction after the product has been sold. Starbucks offers extensive training and education on coffee to their baristas so they are prepared when on the clock. They look for the best employees who will gain a high knowledge of coffee and work well with customers to offer them the best experience possible.

Starbucks has set guidelines to uphold the best organizational structure for the company and create a welcoming environment in every store. They also gain from their continuous increase in stock and sturdy finances to create a solid infrastructure. Human resource management is the process of recruiting, hiring and training employees for the company. Starbucks considers all employees a partner in the business, and strive off close relationships throughout the entire corporation. They also offer a slightly higher wage than competitors and the opportunity to receive health and life insurance through Starbucks.

These things have helped the company retain talented and hard-working employees. Lastly, technology development is used to support and create valued activities. Starbucks has profited off their consistent taste of specialty coffee. This has been possible because of the computerized coffee roaster they developed. After evaluating Starbucks value chain, it is clear they place high importance on their customer service and human resource management. With their welcoming environment and knowledgeable employees, they have created an atmosphere that keeps customers coming back for Starbucks products.

The decision that would be made for the inbound logistics may include what level of inventory to hold. Another important decision may be transportation planning. If the raw material is to be received from multiple sources at different or same point of time, it may be an important decision to determine how many trucks be owned, how many to be rented for some period, what route to take to ensure fuel efficiency as well as in time making the goods available at production floor.

Most important decision taken by Nike was whether to outsource or to develop in their own facilities. Other important decisions may include determining optimum production schedule etc. Outbound logistics include decisions quite similar to inbound one, such as what level of finish good inventory to be kept. What distribution channel to be adopted, whether to sell only through own shoe outlets or mass-distribute it or keep it at specialty stores only? This is an important with regards to Nike because it is on one end competing in the market of professional athletes, at the same time; it has competition for its jogging shoes with weekend athletes or joggers.

Marketing and Sales

Most important issue in marketing Nike shoes, when it was launched were, what brand associations need to be created for it. What promotion mix to be adopted. Who should be used for brand endorsement? For sales, one important decision would be sales forecasting.  One of the segments for Nike was also that of professional athletes. Less in number, but they provide on one higher values and secondly a source of brand endorsement. Thus, while making specialized shoes for them, Nike remains in continuous contact with these athletes to ensure that they get what they really want.

Even after delivering the shoes, their feedback is highly important. Thus, for this segment and others, Nike needs to decide what kind of customer support service it can provide. Accounting Information Required: For above mentioned decisions, accounting information facilitates the decision making.

• For the decision about the desired level of inventory, we need to know inventory holding cost, which is the cost incurred on warehousing operations per unit average inventory.
• For decision about out-sourcing, the popular managerial accounting method of make or buy analysis can be carried out. It would require the accounting information about all the relevant costs (cost that would add or eliminate if we decide or any one of the two options)
• For distribution network decision, one needs to know the intermediary cost (determine by selling price to the distribution minus retail price) as compared with the units sold through that channel.
• For sales forecasting, one need to past sales trends in given period and season.
• For customer support, one need to check its effectiveness through comparing the cost of customer support operations as compared to increased repeat sales from whom the service was provided.

Thus, the questions answered through accounting information may be:

1. What is inventory order cost and holding cost for raw materials?
2. What are the distributor wise sales for our shoes?
3.  What is the sales trend for Christmas season in past five years?
4.  What costs can be eliminated or added if we outsource production?
5. What is total amount of repeat purchase from whom the customer support was provided?

Reference

1. Brewer, P. C. , Garrison, R. H. , & Noreen, E. W. (2008).
2. Introduction to Managerial Accounting. Boston: Mcgraw-Hill College. Connor, T. (2001).
3. Still Waiting For Nike To Do It. San Francisco: Global Exchange. Duchac, J. , Reeve, J. M. , & Warren, C. S. (2008).
4. Financial & Managerial Accounting. Mason, OH: South-Western College Pub. Hilton, R. (2008).
5. Managerial Accounting: Creating Value in a Dynamic Business Environment. New York: McGraw-Hill/Irwin.

Discuss whether EA has evolved any of its activities into competencies that give the company a competitive advantage.

Value Chain

Value Chain describes the activities within and around an organization which together create a product or service.

• Primary activities are directly concerned with the creation or delivery of a product or service.
• Support activities help to improve the effectiveness of efficiency of primary activities.(Johnson, Scholes & Whittington, 2005)
• Value Chain in EA for Creating Value
• Primary Activities
• In-bounds

EA is able to negotiate volume discounts with console makers (Sony & Nintendo) that supplied the CDs and DVDs.

Operations

EA has a virtuous strategy for the game creation and evaluation.

• State-of-the-art tools use to allow for more cost-effective product development and to efficiently convert games designed on one game platform to other platforms. (Compatibility of games)
• Have a strong relationship with console manufacturers.
• Has an edge on its competitors that no other game software company has EA’s ability to localize games or to launch games on multiple platforms in multiple countries in multiple languages.
• Strong alliance with Cinema, Sports & other entertainment companies.
• EA invested heavily in the development of tools and technologies that would facilitate the creation of new games for the existing (and future) game-playing

Out-bounds

• “Proud of” games, i.e. family entertainment games for video game consoles, PCs, mobiles, hand held and online.

Marketing & Sales

• Boost its budgets for marketing and advertising, particularly TV advertising.
• Electronic Arts marketing its products worldwide under four brand logos: EA Sports, EA Sports Big, EA Games, and Pogo. (Diversification of games)
• Has a good relation with mass market retailers (like Wal-Mart, Toys “R” Us, Best Buy etc.), getting more shelf space for its games.
• EA’s games available in approximately 80,000 retail locations worldwide.

Services

• Manufacturer’s guarantee
• Launching game patches for extending games including new missions and characters.

Support Activities

Procurement

• License agreements to create software games with the console manufacturers. (Sony, Microsoft, Nintendo etc.)
• Agreement with the America Online (AOL), to be exclusive provider of a broad aggregation of online games.

Human Resource Management

• Focused strategy is in place for human resource management and development. EA invests time and money in training people, and retaining and developing them.
• Offer healthy working environment, providing Gym, Sports Pitch, Coffee Bar etc.
• Present and former staff has praised Larry Probst’s leadership for his ability to motivate and energize people.

Infrastructure

We can categorize EA’s infrastructure in three ways;

• Product Structure – Making products for Video consoles, Hand held, Mobile games, and Software games.
• Geographical Structure – Two major design studios in Vancouver and Los Angeles and smaller design studios in San Francisco, Orlando, London, and Tokyo.
• Functional Structure – Employees tend to be specialist in the business functions important to EA, such as manufacturing, marketing, finance, and human resources.

Technology Development

• State-of-the-art tools use to allow for more cost-effective product development and to efficiently convert games designed on one game platform to other platforms.
• Electronic Arts has a reputation for new product development and creativity.

Linkages

• License with the console makers for creation of software games and also getting discounted supply of CDs, DVDs or optical disks.
• Geographical infrastructure allows EA to localize its games
• Rewording people creates more productivity from the employees

From the value chain in EA, it points out that how the value creates and how these activities relate to the cost reduction. EA must keep maintaining and improving these values-create activities.

Unique Resources

Unique Resources are those resources that critically underpin competitive advantage and that others can not easily imitate or obtain. (Johnson, Scholes & Whittington, 2005)

The Unique Resources OF EA

• Acquisition of design studios world wide, to localize its games.
• Heavily invested in R & D, facilitate the creation of new games for the existing and future game-playing
• The commonality fleet
• EA website – Pogo.com
• The motivations among EA staff

Core Competence

Core competences are the activities and processes through which resources are deployed in such a way as to achieve competitive advantage in ways that others can not imitate or obtain. (Johnson, Scholes & Whittington, 2005)

Core Competence of Ryanair

• The good and long-term relationship with;
• Console Manufacturers – Sony, Microsoft, Nintendo
• Mass Market Retailers – Wal-Mart, Toys “R” Us, Best Buy
• Cinema, Sports and other entertainment industries
• AOL – To operate the games channel online on AOL
• Diversification of games
• Boost its budgets for marketing and advertising, particularly TV advertising.

Dynamic Capabilities

Dynamic capabilities are an organization’s abilities to develop and change competences to meet the needs of rapidly changing environment

Dynamic capabilities of EA

• Invested in the development of tools and technologies for creation of games for the “new class of beast” consoles.
• Strategic acquisition of ‘Jamadat’ for the rapidly growing business of providing games on mobile phones

The Value Network

In most industries, it is rather unusual that a single company performs all activities from product design, production of components, and final assembly to delivery to the final user by itself. Most often, organizations are elements of a value system or supply chain.

The value network is the set of inter-organizational links are relationships that are necessary to create a product or service.

(Source: M.E. Porter)

So the production of games not only depends on the EA’s Value Chain but also on the suppliers, channels and customer value chains. That when console makers are launching their new consoles; when the retailers have more buying capacity and shelf space and when the product is floating into the customers value chain.

“To further the analysis of competitive advantage, Michael Porter introduced the value chain as a tool to examine the activities of a business. ” As seen in figure 2, “Porter distinguished a firm’s support activities from its operational or primary activities. ”(Book) [pic][pic] Support Activities Firm Infrastructure Human Resource Management Peta Hay, Director of the Tesco Academy, commented: “We believe it is more important than ever to invest in our people as Tesco continues to expand both geographically and into new business sectors.

Tesco has a proven track record of both nurturing internal talent and successfully attracting external senior executives”. (7) Technology Development Procurement Primary Activities Inbound Logistics The overall cost leadership strategic management of Tesco is exhibited in its lean and agile inbound logistics function. Drawing upon Abeysinghe (2010), the company uses its leading market position and economies of scope as key bargaining powers to achieve low costs from its suppliers.

The analysts have also highlighted the constant upgrading of their ordering system, approved vendor lists, and in-store processes to induce effectiveness and efficiency into the company’s inbound logistics operations. Operations Management Tesco has been praised by a number of supply chain management critics for its effective use of IT systems that facilitate the company’s low cost leadership strategy. According to Tesco (2010), the company has invested over ? 76 million in streamlining its operations through their Tesco Digital program, which is a third generation ERP solution for the company. The company has achieved ? 50 million in increased profitability during 2009 alone due to the introduction of this system. This company -wide ERP system has also facilitated the minimisation of stock holdings within the company. Outbound Logistics Tesco holds leadership position in online and offline food retail segments, which is due to its efficient and effective outbound logistics. Drawing upon Mintel (2010), the company has developed a range of store formats and types, which are strategically placed to achieve maximum customer exposure. These formats include Express, Metro, Superstores, Extra and Homeplus, which are segmented according to the target population.

Marketing and Sales Loyalty programs like Tesco Clubcard are being introduced through information technology advances which dissuade the customers from switching over to their competitors. Tesco has introduced its Greener Living Scheme to give consumers advice on environmental issues, including how to reduce food waste and their carbon footprint when preparing meals . Services Tesco has been pursuing a dual strategy of cost leadership and differentiation, which has led to an increased importance placed on customer service.

Drawing upon Keynote (2010), this dual strategy is exhibited through the development of self-service kiosks, financial services, focused direct marketing and promotions. In order to put Tesco’s value chain analysis into perspective, it should be noted that despite cost leadership strategy the company has been able to create a high degree of value in comparison with its key competitors. The relative analysis of the value created by the big four supermarket chains, i. e. , Tesco, Asda, Sainsbury’s and Morrisons has been provided as follows: