Introduction

Hitachi Ltd. is Japan's largest manufacturer of electrical machinery and a leading

producer of semiconductors. The company contributed two percent of Japan's gross
national product in the early 1990s. The conglomerate's roster of over 20,000 products
runs the gamut from the smallest, most powerful computer memory chips to massive
nuclear and hydroelectric power plants, but its most familiar lines are consumer
electronics.

Hitachi have been doing development, manufacture, sales and services of automotive
components, transportation related components, industrial machines and systems.
Hitachi Value Chain

2.1 Primary Activities

The primary value chain activities of Hitachi Conglomerate are directly involved in
producing and selling the product to targeted customers. Analysis of primary value
chain activities can improve the performance of Hitachi Conglomerate as explained
below.

2.1.1 Inbound Logistics

It is important to develop strong relationships with suppliers as their support is

necessary to receive, store and distribute the product. Without analysing the in-bound
logistics, Hitachi Conglomerate can face various challenges in product development
phases. Analysis of in-bound logistics requires a company to focus on every aspect of
transformation from raw material to finished product. Some examples of inbound
logistics are retrieving raw material, storing the inputs and internally distributing the raw
material and components to start production.

2.1.2 Operations

The importance of analysing operational activities raises when raw material arrives, and
Hitachi Conglomerate is ready to process the raw material into the end product and
launch it in the market. Some examples of operational activities are machining, packing,
assembling and testing. Equipment repair and maintenance also falls into this category.

It includes both- manufacturing and service operations. Analysis of operational activities

is important for improving productivity, maximising the efficiency and ensuring the
competitive success of Hitachi Conglomerate. The increased productivity can help
Hitachi Conglomerate to achieve consistent economic growth, increase profitability and
set a powerful basis for competitive advantage.

2.1.3 Outbound Logistics

Outbound logistics include the activities that deliver the product to the customer by
passing through different intermediaries. Some outbound logistics activities are material
handling, warehousing, scheduling, order processing, transporting and delivering to the
destination. Hitachi Conglomerate can analyse and optimise the outbound logistics to
explore competitive advantage sources and achieve its business growth objectives.

Because, when outbound activities are timely managed with optimal costs and product
delivery processes put a minimum negative effect on the quality, it maximises the
customer satisfaction and increases growth opportunities for the firm. Hitachi
Conglomerate should pay specific importance to its outbound value chain activities
when its offered products are perishable and require quick delivery to the end customer.

2.1.4 Marketing and Sales

At this stage, Hitachi Conglomerate will highlight the benefits and differentiation points
of offered products to persuade the customers that its offering is better than
competitors. Only producing a high quality product at affordable costs and distinctive
features cannot create value until Hitachi Conglomerate invests on the marketing and
sales activities. The sales agents and marketers play an important role here.

Some examples of Hitachi Conglomerate's marketing and sales activities are- sales
force, advertising, promotional activities, pricing, channel selection, quoting and building
relations with channel members. The company can use the marketing funnel approach
to structure its marketing and sales activities. The marketing strategies can either be
push or pull in nature, depending on the Hitachi Conglomerate’s business objectives,
brand image, competitive dynamics and current standing in the market.

Effective and wisely integrated marketing activities can develop the brand equity of
Hitachi Conglomerate and help it stand out from the competition. However, Hitachi
Conglomerate must avoid making false commitments about product features that
cannot be fulfilled by the production department. It indicates the need to ensure
coordination between different value chain activities.

2.1.5 Services

The pre-sale and post-sale services offered by the Hitachi Conglomerate will play an
important role in developing customer loyalty. The modern customers consider post-
sale services as important as marketing and promotional activities. The power of
negative e-WOM due to poor support service cannot be undermined in the current
technologically advanced era. The company must analyse its support activities to avoid
damaging brand reputation, and instead use it as a tool to spread positive word of
mouth due to quick, timely and efficient support services.

2.2 Secondary Activities

The support activities play an important role in coordinating and facilitating the primary
value chain activities. Hitachi Conglomerate can also benefit from analysis of its support
activities as explained below.

2.2.1 Firm infrastructure

The firm infrastructure denotes a range of activities, such as- quality management, legal
matters handling, accounting, financing, planning and strategic management. Effective
infrastructure management can allow Hitachi Conglomerate to optimise the value of the
whole value chain. Hitachi Conglomerate can control the infrastructure activities (or
commonly called overhead costs) to strengthen the competitive positioning in the
market.

2.2.2 Human resource management

Hitachi Conglomerate can analyse human resource management by evaluating different

HR aspects, including- recruiting, selecting, training, rewarding, performance
management and other personnel management activities. The effective HR
management can allow Hitachi Conglomerate to reduce competitive pressure based on
motivation, commitment and skills of its workforce. The company can also achieve its
cost minimisation objectives by analysing hiring and training costs with their relative
return. The heavy dependence of Hitachi Conglomerate on employees' talent will
increase the importance of this value chain support activity.

2.2.3 Technology development

In a modern, technological advanced era, almost all value chain activities depend on
technological support. The technological integration in production, distribution,
marketing and human resource activities requires Hitachi Conglomerate to realise the
importance of technology development. It can be divided into product and process
technological development activities. Some examples are- automation software,
technology-supported customer service, product design research and data analytics.
The research and development department of Hitachi Conglomerate is classified in this
category.

2.2.4 Procurement

The procurement in value chain denotes the processes involved in purchasing the
inputs that may range from equipment, machinery, raw material, supplies, raw material
and other items necessary for producing the finished product. Due to its linkage with
multiple value chain activities, Hitachi Conglomerate should carefully consider its
procurement activities to optimise the inbound, operational and outbound value chain.

As mentioned above, the application of Porter Value Chain model depends on

understanding the importance of all activities. After understanding the relative
importance of identified value chain activities, Hitachi Conglomerate should highlight
areas where value can be added, cost efficiency can be achieved, differentiation basis
can be set, or processes can be optimised.

Value Chain - a set of activities that a firm operating in a specific industry performs in
order to deliver a valuable product or service for the market.
Global logistics services that bring innovation to the value chain optimize the entire
supply chain from end to end (E2E), from procurement and production to sales. These
services use the latest digital technologies to replicate the supply chain in cyberspace
and provide optimal solutions as feedback to physical space.

Global Logistics Services for Value Chain Innovation : Hitachi Review

Hitachi marketing strategy

https://www.marketing91.com/marketing-strategy-hitachi/