Harley-Davidson: External and Internal Analysis

Page 1 of 2 Value Chain Activities

© 2006 Argosy University

Value Chain Activities Primary Value Chain Activities

? Inbound Logistics: All activities designed to receive warehouse raw materials and bring the raw materials to the manufacturing process comprise inbound logistics. For example Dell Computers manages inbound logistics by ensuring that trucks from its suppliers wait in the parking lot to deliver components to the production line as needed, virtually eliminating the cost of carrying inventory.

? Operations: This refers to the process of transforming raw materials into finished

goods and services. For example Southwest Airlines (SWA) uses a human resources philosophy based on hiring for attitude and providing the best training to its employees. This philosophy ensures that the operations of the business are performed by people who exude the SWA cultural vibes and deliver fun, friendly, and efficient services .

? Outbound Logistics: The warehousing and distributing of finished goods comprise outbound logistics. For example Wal-Mart specializes in warehousing and distribution. Its current emphasis on managing logistics includes implementing radio frequency identification tagging to track inventory of its top suppliers.

? Marketing and Sales: The identification of customer needs, the designing of products,

and the generation of sales comprise marketing and sales. For example Apple recently launched three versions of the popular iPod and transformed the music industry with itunes. Many other market players are copying the iPod.

? Service: This refers to the support and service of products and services after they have been sold to the customers. For example, in 2005, Lexus automobiles received three JD Powers awards — a gold standard in customer service — and numerous other awards for exemplary customer care.

Secondary Activities: These support the primary activities and include:

? Firm Infrastructure: A firms infrastructure consists of organizational design, control systems, and company culture. For example Google has a unique culture that says, “Never settle for the best.” "The perfect search engine," says Google’s co-founder Larry Page, "would understand exactly what you mean and give back exactly what you want."

Given the state of search technology today, that's a far-reaching vision requiring research, development, and innovation to realize. Google is committed to realizing the goal. Though acknowledged as the world's leading search technology company, Google's goal is to provide a much higher level of service to those who seek information, whether they're sitting at a desk in Boston, driving through Bonn, or strolling in Bangkok. Google has persistently pursued innovation and pushed the limits of existing technology to provide a fast, accurate, and easy-to-use search service that can be accessed from anywhere.

Page 2 of 2 Value Chain Activities

© 2006 Argosy University

? Human Resources (HR) Management: It refers to recruiting, staffing, training, developing, evaluating, compensating, and all other people-related functions. For example, in 2005, Fortune Magazine ranked Genentech — a $4.6 billion biotech company — as the Number 1 Best Place to Work. Genentech received the acknowledgement for creating a place to work where each person is a “…valued member of a cancer-fighting team,” and has a great time while at work. In fact 95 percent of the workers are shareholders, and they have made large profits from the soaring stock.

? Technology Development: The technology needed to support value creation for customers comprises technology development. For example, in 2005, the American Business Council gave UPS the award for being the most innovative company in its use of technology in e-business. UPS is the world’s largest global transportation company, offering the most extensive range of e-commerce and supply chain solutions for the movement of goods, information, and funds. UPS serves more than 200 countries and territories worldwide.

? Procurement: It refers to all sourcing and purchasing of key inputs, raw materials, or other key resource. For example, Access Business Group won the 2006 award for Global Award for Supply Chain Excellence. The recipient was selected by the Supply Chain Council as the organization that is deemed to have made the greatest contribution to demonstrating or advancing the supply chain management body of knowledge within the preceding year through an implementation activity, research, product or methodology development, or academic research.