Components of Commercial Value Chain
February 12, 2025
The Canadian healthcare system was known to be the best amongst all the developing countries in the world. This is because it provided its citizens with the advantages of universal health care. The Canadians have always taken pride in the fact that their government considers healthcare to be a fundamental human right and is willing […]
5G is the latest buzzword in the telecommunication sector. For a layman, it is difficult to understand what the buzz really is all about. Modern-day consumers have lived through the introduction of 3G and 4G. They believe that 5G will just be a minor enhancement over the way things are currently functioning now. However, that […]
There is a proliferation of electronic payment systems in the 21st century. Debit and credit cards have become the norm, and cash has become obsolete. However, many people still prefer to use cash because of some benefits that it offers. Up until now, people have been facing a choice between using the electronic medium and […]
Living for the Next Quarter Of late, many publicly listed companies have been living “quarter to quarter” or the practice of setting targets, tracking them for progress, and closing out sales and revenue generating items based on the next quarter which is a short term imperative rather than planning for the longer term. This has […]
The Rise of Oligarchies and its Effect on Consumers A noticeable phenomenon in the business world ever since the 1970s has been the rise of large corporations whose turnover sometimes exceeds that of the budgets of entire nations. These conglomerates or oligarchies are the direct result of neoliberal policies pursued in the West starting from […]
All companies undertake series of activities in order to deliver a product to the customers. These series of activities like procurement of raw material, storage, production, distribution, etc. are referred as value chain activities. The function of value chain activities is to add value to product at every stage before it is delivered to the customers. There are two components, which make value chain - primary activities and secondary activities. The primary activities are directly associated with the manufacturing of products like supply management, plant operations, etc. The secondary activities are referred to as support functions such as finance, HR, information technology, etc.
In the era of advanced information and communication technology, many businesses have started operations on the internet as its medium. Through the internet, many commercial activities like buying, selling, auctioning is taking place. This online commercial activity is known as e-commerce. E-commerce value chain has series of activities like electronic fund transfer, internet marketing, distribution channel, supply chain etc.
Every activity within a physical value chain has an inherent information component. The amount of information that is present in activities determines, company’s orientation towards e-commerce. It has been observed that companies with high information presence will adopt e-commerce faster rather than companies with lower information presence.
For example, a computer manufacturer has high information presence, i.e. they can provide a great deal of product information through their website. Consumers also have flexibility to determine the product configuration using the website. Such computer manufacturers and companies with comparative business model are also likely to adopt e-commerce.
Activities which comprise of the value chain are undertaken by companies to produce and sell product and services. Some of the activities done within the value chain are understanding customer needs, designing products, procuring materials for production, production, storage of products, distribution of products, after sale services of products and customer care.
There are two ways to assess information presence. The first way is by looking at the industry, and second way is by looking at the product. In an industry with high information presence, it has been observed that:
For a product with high information presence following is observed:
Industry and product which satisfy above conditions are likely to adapt e-commerce.
Companies with high information presence were the first to look at e-commerce as an alternate way of conducting business. For example, software companies, much of there is business is done through the internet. Their website provides in-depth product information through e-brochure, video, client opinion, etc. Sales leads are generated online; purchase and fund transfer is done, and also after-sales service is done online.
These high information companies have made substantial investment in human resources and information/communication technology.
Companies which are moving towards e-commerce need to have business model developed to support online activities. The dotcom burst of 2000 has served hard example about companies doing e-commerce.
Your email address will not be published. Required fields are marked *