Week 2 – T2.3
In describing the value chain for a new business in buying and selling CD’s to new students on a new website there are many aspects of this. Raw materials, inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing & sales and customer services. All these will be touched on in the following paragraphs.
Raw materials would obviously refer to the CD’s, although this might become a larger endeavor with DVD’s and software programs. Let’s just go with the understanding that the students would be able to download the CD’s or get a “hard copy”. The downloadable version might not necessarily be considered a raw material as there is nothing physical about it but it would be something that would bring in revenue. But the hard copy would definitely be considered a raw material.
Inbound logistics in this case would pertain to having a tracking system on the website (like FedEx, Amazon, etc) to keep track of all the CD’s for inventory purposes. This would have to be included on the website for purchasing CD’s would depend on when it would they would be received in the warehouse/storage and consequently would depend on when the purchaser would have the product; although that would not apply to the downloadable version as this would be available directly. The company would have to still keep track of the downloadable versions as this would go towards company spend and profits.
Production would be dependent on a third party, sellers of used CD’s, and record companies for the hard copy and electronic version. The only production that would need to be done by my company would be labels, shipping boxes, invoicing; basically anything that would need my company logo on it.
Finished product storage/Automated storage and retrieval systems this is the most important of all. This system would have to keep track of shipments (both coming and going), inventory, cost of product, cost to my company and profits. This would all have to be in the system to retrieve at anytime if a question should arise. Outbound logistics would be the shipment/electronic delivery of the CD.
Marketing and Sales again could be outsourced to another company and handle. Sales would be done almost totally online unless there is an issue and customer service is handling the order. Adds that pop up when on a website, like face book, would be a wonderful marketing strategy. Customer service would also have to be listed as a link on my company’s website but you would need a live person to discuss any issues – also a good item to outsource.
Upstream Management and Downstream Management had been touched in this paper. I think having a website would differ a little from a company that has all raw materials to sell.
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