This document analyzes the value chain of the automobile industry. It describes the primary and support activities of the value chain, including inbound logistics, operations, outbound logistics, marketing and sales, service, procurement, human resource management, technology development, and infrastructure. It then provides examples of how these activities apply specifically to the automobile industry, such as purchasing raw materials globally, efficient production operations like Toyota's JIT system, extensive dealer networks, and after-sales service. Competitive advantages from value chain analysis include lower costs through efficient activities and supplier relationships, as well as differentiation through innovative practices in manufacturing, operations management, and marketing.

1. Value Chain
Analysis
AUTOMOBILE INDUSTRY
PREPARED BY : KAPIL SHENDGE

2. Introduction

3. What is Value Chain
The primary value chain activities are:
 Inbound Logistics: the receiving and warehousing of raw
materials, and their distribution to manufacturing as they
are required.
 Operations: the processes of transforming inputs into
finished products and services.
 Outbound Logistics: the warehousing and distribution of
finished goods.
 Marketing & Sales: the identification of customer needs
and the generation of sales.
 Service: the support of customers after the products and
services are sold to them.

4. Continued…
These primary activities are supported by:
 Infrastructure: organizational structure, control systems,
company culture, etc.
 Human resource management: employee recruiting,
hiring, training, development, and compensation.
 Technology development: technologies to support
value-creating activities.
 Procurement: purchasing inputs such as materials,
supplies, and equipment

5. Competitive Advantages
of Value Chain Analysis
 Cost advantage: by better understanding costs and
squeezing them out of the value-adding activities.
 Differentiation: by focusing on those activities associated
with core competencies and capabilities in order to
perform them better than do competitors.

6. Value Chain for
Automobile Industry

7. Inbound Logistics
 Here goods are received from a company's suppliers.
 They are stored until they are needed on the
production/assembly line.
 Goods are moved around the organization.
 Purchases their raw material from all around the world, In
order to maximize their availability of raw material

8. Operations
 This is where goods are manufactured or assembled.
 Individual operations could include organizing the parts
to make new cars & the final tune for a new car's engine.
 Industries are known for their reliability which comes from
efficient operations.
For eg. Toyota’s JIT

9. Outbound Logistics
 The goods are now finished, and they need to be sent
along the supply chain to wholesalers, retailers or the final
consumer
 Many Manufacturers manage their own Showrooms in
different countries
 Sometimes even raw parts are supplied to different
Manufacturing units

10. Marketing and Sales
 This area focuses strongly upon marketing communications
and the promotions mix
 Communication channels can be :
1. Newspaper Advertisements
2. TV commercials
3. Social Media Marketing
4. Demo Cars
5. Exclusive Showrooms

11. Services
 Large Network of Workshops available for Services
 This includes all areas of service such as ;
1. Final Checking
2. After Sales Services
3. Complaint handling
4. Training
5. On-call Services

12. Support Activities
 Procurement :
 This function is responsible for all purchasing of goods,
services and materials
 Aim is to secure the lowest possible price for purchases of the
highest possible quality.
 Technology Development :
 Important source of competitive advantage.
 Companies need to innovate to reduce costs and to protect
and sustain competitive advantage.

13. Support Activities
 Human Resource Management :
 Employees are an expensive and vital resource.
 It Manages recruitment and selection, training and
development, & rewards and remuneration.
 For eg. Toyota motors consider their employees as HUMAN
CAPITAL.
 Infrastructure :
 This activity includes corporate or strategic planning.
 Manufacturing plants, Machineries, etc

14. Competitive Advantages
 Cost Advantage
 Cheaper Supplier
 Efficient Assembly Line
 Brand Owned Showroom
 Differentiation
 Use of JIT approach
 Efficient Operations Management System
 CRM , HRM & MIS
 Lean Manufacturing
 Innovative Marketing Strategies