Industry Value Chain Analysis

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Industry Value Chain Analysis

Value Chain Analysis代写 Using the above Porter’s model, the paper will carry out value chain analysis of the fashion industry for Louis Vuitton and Gucci.

 

Introduction

Value Chain Analysis is the identification of the primary and support activities that add value to the output and the analysis of the events which reduce the cost of production as well as increase the differentiation (Jurevicius, 2013). Using the above Porter’s model, the paper will carry out value chain analysis of the fashion industry for Louis Vuitton and Gucci. Additionally, using a Small Business, it will analyze the opportunities in the industry and recommendations for competitive analysis.

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Louis Vuitton Value Chain Analysis  Value Chain Analysis代写

A value chain for LV will be made to find out the critical areas for improvement especially in the integration of Information Technology in the value creation for competitive advantage and differentiation.

Support Activities  Value Chain Analysis代写

i. Firm Infrastructure: Looking at the LV infrastructure, it is clear that it has elaborate general management. One of its key advantages is that the company has a strong management team. The company leadership has it to the heights of one of the leading fashion dealer in the world. The management has realized the need to have innovative and limitless changes in the market offering.

ii. Human Resource: The has established human resource management department which focuses on the affairs of its workers. The company produce one of the most classic luxury fashion product around the world, and therefore investing in the best human resource is not an option. The Vuitton manufacturing is labor intensive and works with a group of about 20 to 30 workers who produce more than 100 handbags per day. Each team works on one product at a time and has the freedom to suggest the product price.

iii. Procurement: The company does not depend much on the suppliers as its design and manufacture its product in-house for product quality control and to reduce dependency. The company has 17 manufacturing shops including 12 in France, 3 in Spain, and two United States.

iv. Technology Development: For quality assurance, Vuitton has its test laboratory which is a high-tech “torture chamber” it luxury products. The products are put into the rigorous tests to ensure quality and durability. The company uses robots to mimic users of the bags to measure how long it can go without damage like fading or broken zipper.

Moreover, LV has a computer program used in leather cutting by identifying the flaws on the leather.

The computer is also used to increase the efficiency thus reducing the amount of wastage. Also, the company has an online ordering system. The system supplements the outlets where the clients can place orders online and have them delivered to them.

Primary Activities  Value Chain Analysis代写

i. Inbound Logistics: The inbound logistics include transport, storage, and delivery. The company has invested in sourcing for the best suppliers of hides, zippers, clasps. The luxury products use leathers sourced from Northern Europe where there are few insects’ bits which affect the quality of the skin. It also has enough transport and storage system for the inventories.

ii. Operations: The manufacturing and design of bags are done within 17 factories owned by LV. Due to the increase in luxury products, the company is planning to expand. It has invented a system whereby employees work in the group of 10, thus increasing the space in the factories for additional workers. The factory teams of employees include the specialists in craftwork, designs, and artists.

iii. Outbound: The company has its warehouse from which the distribution is controlled. LV use FedEx services to transport its products.

iv. Marketing and Sales: Since the company deals with luxury products, t does intensive marketing using celebrities. They also use various personalities from around the world.

v. Service: The company values its customer, so there is always a person present to serve them. LV also offer aftersales-services like repairs with a lifetime guarantee of quality services form the product. Further, the company also provide personalized services like custom made bags.

Gucci Value Chain Analysis  Value Chain Analysis代写

Gucci is one of the leading fashion company in the world. The company deals with luxury products across various range. The value chain analysis will establish how the Gucci has been able to create a competitive advantage to remain at the top of the market leadership.

Support Activities

i. Infrastructure: The company is leading in the world of fashion owing to the elaborate, creative and focused leadership. But in 2014, Gucci was facing as shaky ride with its artistic director facing departure (“The Fashion Law, 2014). Nevertheless, the company has remained competitive.

ii. Human Resource: Soodeen (2015), published an online article describing what human resource managers can learn from Gucci. Gucci has mastered the art of tapping the best talents and passion-driven fashion designers from around the world. The employees work in teams with each team having specialists.

Value Chain Analysis代写
Value Chain Analysis代写

iii. Procurement: Most of the Gucci products are designed and manufactured in-house to control product quality. The company has also embarked on the e-commerce and social media marketing as a way of brand awareness and maintenance.

iv. Technology: The company has invested in the computer-aided designs and controls in apparel cutting. The use of computer reduces the amount of wastage because of errors. Gucci also has invested in the online ordering system where customers can access the various products it sells. The online platform supplements the company outlets around the world.

Primary Activities  Value Chain Analysis代写

i. Inbound Activities: The company has its storage facilities where finished products are stored before shipment and where the inventories are also stored for control. Although it manufactures most of its textile and leather products, it also outsources some services to the most trusted suppliers. Such the services outsourced include the supply of zippers, hides, cotton, silk, and more.

ii.  Operations: The company directly operates 278 stores worldwide. The stores are used as an outlet for the company products. As a growth strategy, the company has been manufacturing a wide range of products ranging from shoes, watches, fashion clothes, bags, and more. This made it more diverse and competitive.

iii. Outbound: The company takes distribution very seriously as it only through an elaborate distribution system that the finished products can reach the customers. It has its warehouse where products are stored for dispatch. It uses the DHL services for transport.

iv. Marketing and Sales: For long Gucci have learned to use celebrities and other personalities to do its marketing. It has also integrated the internet in its marketing strategies through the use of social media and online marketing.

v. Services: As the company guarantee quality, its products can be returned for replacement or free repair.

IT Used In LV and Gucci  Value Chain Analysis代写

Both Louis Vuitton and Gucci use in marketing, computer-aided designs, and ordering and sales as well as in the integration of information management systems in human resource, finance, and procurement.

Opportunities and Recommendation for Arg Enterprise  Value Chain Analysis代写

Arg Enterprise is a small business that deals with fashion and other luxury products. The company needs to grow in the midst of big companies like Gucci and Louis Vuitton. To do so, it has to exploit the gaps in their services offering to remain competitive.

One of the missing IT implementations is Artificial Intelligence. The AI can be used in all the aspects of customers services to increase the customer experiences. In this era of Big Data, most of the retailers like Arg Enterprise need to invest in AI marketing to expand the market reach.

Another critical gap is mobile commerce which has not been implemented by the two companies. Through the use of customized mobile apps, clients can easily reach the products online without having to visit the company website.

One of the major trends in fashion and design is the use of Virtual/augmented reality (VR). The dressing room can now be virtualized. It presents an opportunity for the Arg Enterprise.

General Recommendations  Value Chain Analysis代写

The emergence of artificial intelligence has changed a lot of domains in the manufacturing industries, and fashion and design is not an exception. The above companies should implement the use of AI in robots for manufacturing, human services, models, transport, and marketing.

References  Value Chain Analysis代写

Jurevicius, O. (2013). Looking at your Value Chain will make you Smarter. Retrieved from https://www.strategicmanagementinsight.com/tools/value-chain-analysis.html

Soodeen, S. (2015). What HR/Management professionals can learn from the likes of Gucci. Retrieved from http://www.hrmguide.net/australia/commitment/high-performance-gucci.htm

The Fashion Law. (2014). Gucci Maybe Exciting Again in the Near Future. Retrieved from http://www.thefashionlaw.com/home/gucci-may-be-exciting-again-in-the-near-future

Value Chain Analysis代写
Value Chain Analysis代写

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