Value Chain Analysis of Aggreko - 2672 Words

University of Stirling Pre-Masters Skills for Business Environment Value chain analysis of Aggreko Name: Rita Date: 2011 Tutor: David Dick Value chain analysis of Aggreko 1. Introduction Currently, along with the increasingly development of globalization, every walks of life has to confront with the fierce competition. Even electric power market is no exception as well. Furthermore, more and more companies have not satisfied with the domestic market, they have focused on expanding the international market, such as Aggreko. As leader of the world s temporary power industry Aggreko has achieved a serious of success in recent years, even they need to face to intense competition from domestic and international†¦show more content†¦Specifically, the primary activities comprise inbound logistics, operation, outbound logistics, Marketing and sales, and service. Whilst there also have some activities, including firm infrastructure, HR management, technology development, and procurement, support company’s primary activities (ibid). Furthermore, a firm’s profitability can attribute to its effectiveness in performing these activities efficiently, and in t hese activities, a firm has the opportunity to generate superior value. On the other hand, a competitive advantage also can be achieved by reconfiguring the value chain to provide lower cost or better differentiation (McGuffog and Wadsley, 1999). For those reasons, the value chain model is a very useful analysis tool for defining a firm’s core competencies, such as cost advantage and differentiation (Ibid). In terms of cost advantage, Porter identified 10 cost drivers related to value chain activities, included economies of scale, learning, capacity utilization, linkages among activities, interrelationships among business units, degree of vertical integration, timing of market entry, firm’s policy of cost or differentiation, geographic location, and institutional factors. The company can through controlling these drivers develop a cost advantage (porter, 1985). In addition, porter also identified divers of uniqueness that related to the value chain, included PoliciesSh ow MoreRelatedAccounting for Non Accounting Students45396 Words   |  182 Pages95 96 97 12 Interpretation of accounts 13 Contemporary issues Case studies: The communication of financial information Interpretation of accounts 14 Foundations 15 Direct costs 16 Indirect costs 17 Budgeting 18 Standard costing 19 Contribution analysis 20 Specific decisions 21 Capital investment 22 Emerging issues Case studies: Fixed and flexible budgets Standard cost operating statements Pricing PART 2 MULTIPLE CHOICE QUESTIONS AND ANSWERS Multiple choice questions Answers to multiple choice