Assignment 3 – Integrated Value Chain Evaluation

Step 1: Select your Product

Onstream you will find a PDF file called ProductMatrix. This contains a 26 x 26 matrix with three product suggestions in each cell. Use your initials to point to one of these cells. For example, if your name is James Yang, then navigate yourself to Column J and Row Y. This cell contains three products; (1) BONELESS FROZEN FISH FILLETS, (2) SUGAR COATED PEANUTS and (3) FEIJOA. Based on your interests, you can choose any one of these three. However, if you find a product in one of the neighboring cells more interesting, then feel free to rather pick that one instead.

Step 2: Research your Product

It is now important for you to understand how this product is produced and how the value chain is configured. This is the largest part of the assignment and your research should include:

• What are the different ingredients and processes required to produce and sell this product?
• What does the market look like?
• Where is the market?
• What attributes drive value for the consumer?
• What are the limitations? (e.g. timing / location / regulations / public opinion / etc.)
• What does a “high value” version of this product look like and how will it compare to a “low value” version? (it may be necessary to limit this conversation to products that are made of the same base materials, for example, don’t compare cheap wooden chopsticks to porcelain chopsticks – rather stick two products manufactured from the same type of material).
• How will competitors try to differentiate themselves?
• Draw a diagram of the supply chain in detail with all its processes, product streams, waste streams, and sub-branches.
• Try to work out how the value chain will ideally be configured to optimize value delivery at the right price to the consumer.

There are many resources available to aid you with your research. This includes company web pages, YouTube clips, internet shopping sites, and articles in the media.

Step 3: Write your Report

Section 1. Introduction:
One paragraph to briefly introduce your product. Include pictures, information about the market and the consumer and explain the primary value attributes and price ranges of different versions of this product. Also, use the Elements of Value by Almquist et al. (2016) to depict in which category your product fits
best.

Section 2. Value Chain Description:

2.1 Provide a detailed illustration of the supply chain from the base product(s) on the left to the consumer on the right. Remember to include side branches, such as packaging, other ingredients, and waste/by-product lines. Where appropriate, include the geographical location of some of the supply chain components.

2.2 Use the approach by Lazzarini, Chaddad & Cook to provide a layered NetChain of the parties directly involved in the supply chain. In one paragraph, comment on which of these parties do you think have the most power and explain how do (or how can) other parties in the chain try to balance this power.

2.3 In a table, list the other stakeholder groups (e.g. Government / Public / Employees / etc.) who potentially draw value from this chain and state what do you think their respective value expectations are.

Section 3. Business Revenue, Cost and Risk

3.1 Apply any two product classification models to help explain the degree of the complexity that prevails in this value chain. Motivate your answer in a short paragraph.

3.2 Insert a table for the following: List each business layer depicted in 2.2 and
provide:
(a) What are the main costs and risks for this business layer, and given this,
(b) What do you think will be the main elements of business strategy in this layer?

3.3 In a short paragraph explain, regardless of whether the product currently has a strong brand; If a brand was to be built for this product, what will be the Does main value attribute associated with this brand?

3.4 In one paragraph, argue which pricing approaches will best suit this product and whether pricing may differ based on the situation.

Section 4. Interchain Elements Among the relationships that were drawn in your NetChain in Section 2.2 (arrows):

4.1 Discuss where do you think bounded rationalities of different parties could impact the value chain.

4.2 Identify where could opportunism benefit a chain member but cause detrimental impacts on the rest of the chain.

4.3 Point out cases of asset specificity (or alternatively state why that is not an issue in this value chain).

4.4 Discuss points in the value chain where information asymmetry may be present and may cause a power imbalance, or degrading product value, and/or limiting long-term partnerships.