5. Sales (06/2010)
Cash 1 $ 25,000.00
cash 2 $ 149,555.00
Receivables $ 15,000.00
Total Sales $ 189,555.00
Expenses(06/2010)
Cost of Goods $ 13,000.00
Admin Expenses $ 11,650.00
Payroll $ 12,000.00
Total Expenses $ 36,650.00
Top Line
Reach new customers, offer new products,
cross-sell services, offer complementary
products
Bottom Line
Optimize manufacturing processes,
decrease transportation costs, reduce cost of
human capital, minimize errors in a process
6.
7.
8. Your
suppliers
Your
Organization
Your
Customers
Supplier power to be
low
Buyer power to be high
Supplier power to be
high
Buyer power to be low
Buyer power is high when buyers
have many choices from whom to buy
and low when their choices are few.
Supplier power is high when buyers
have few choices from whom to buy and
low when their choices are many.
9.
10.
11.
12.
13. Receive and
Store Raw
Materials
Make the
product or
service
Deliver the
product or service
Market and sell
the product or
service
Service
after
the
sale
Purchasing
Research and Development
Human Resources Management
Management, Accounting, Finance, Legal
14. Receive
and Store
(5.2%)
Make the product or service
(40.3%)
Deliver the
(6.6%)
sell
4.3%
Service
after (2.2%)
Purchasing (27%)
Research and Development (4.2%)
Human Resources Management (7.1%)
Management, Accounting, Finance, Legal (3.1%)
Value-added view of a
necktie manufacturer
Receive
and Store
(9.2%)
Make the
product or
service
(10.4%)
Deliver
the
(18.2%)
Sell
36%
Service
(14.5%)
Purchasing (12%)
Research and Development (3.3%)
Human Resources Management (3.2%)
Management, Accounting, Finance, Legal (5.2%)
Value-reduced view of a
necktie manufacturer
15. Rece
ive
and
Stor
e
(5.2
%)
Make the product
or service (40.3%)
Delive
r the
(6.6%)
sell
4.3
%
Service
(2.2%)
Purchasing (27%)
Research and Development (4.2%)
Human Resources Management (7.1%)
Management, Accounting, Finance, Legal (3.1%)
Value-added view of a
necktie manufacturer
Recei
ve
and
Store
(9.2%
)
Make
the
produc
t or
service
(10.4%
)
Deliver
the
(18.2%
)
Sell
36%
Service
(14.5%)
Purchasing (12%)
Research and Development (3.3%)
Human Resources Management (3.2%)
Management, Accounting, Finance, Legal (5.2%)
Value-reduced view of a
necktie manufacturer
Evaluating value chains is particularly effective
because it forces the organization to gather and
analyze quantifiable information.
Editor's Notes
IT is only an essential element of the strategic vision, the initiative which the organization chooses to undertake so as to achieve competitive edge.
IT is only an essential element of the strategic vision, the initiative which the organization chooses to undertake so as to achieve competitive edge.
Top line approach: goal is to increase revenues
Bottom line approach: goal is to minimize expenses
Application of RGT depends on considerations of the maturity of the organization.
Regardless of maturity, all organization must focus on TRANSFORMATION.
Buyer power is high when buyers have many choices from whom to buy and low when their choices are few.
Loyalty programs (reward customers based on the amount of business they do with particular customers) are best IT-based examples of reducing buyer power.
Supplier power is high when buyers have few choices from whom to buy and low when their choices are many.
The value chain is an important graphical tool that helps you identify important business processes within the entire value chain.