Value Chain Analysis of Kiel’s Café

Porter's value chain concept is widely used in business. However, Kiel’s Café should not use it as a
strict, stand-alone structure, allocating equal weight to all actions. To conduct a successful Value
Chain Analysis, Kiel’s Café must recognize that not all activities or functions deserve the same
amount of inspection. As a result, the first step in modifying the Porter Value Chain framework is to
determine the significance of activities based on their position in the product/service delivery
process.

According to Porter, the following are the major value chain activities:

2.1 Primary Activities

Kiel’s Café major value chain operations are directly involved in making and marketing the product
to targeted clients. As mentioned below, analyzing major value chain operations can help Kiel’s Café
enhance its performance.

2.1.1 Inbound Logistics

It is critical to cultivate excellent connections with suppliers since their assistance is required to
receive, store, and distribute the product. Kiel’s Café may encounter a variety of issues throughout
the product development process if in-bound logistics are not thoroughly examined. In-bound
logistics analysis necessitates a company's attention to every stage of the process, from raw material
to final product. Inbound logistics might include obtaining raw materials, storing the inputs, and
internally distributing the raw materials and components to begin manufacturing.

2.1.2 Operations
When raw material comes, the necessity of analyzing operational operations increases, and Kiel’s
Café is ready to transform the raw material into the finished product and put it into the market.
Machining, packaging, assembling, and testing are examples of operational operations. This category
also includes equipment repair and maintenance.

Manufacturing and service operations are also included. Analysis of operational operations is critical
for increasing production, increasing efficiency, and assuring Kiel’s Café competitive performance.
Increased efficiency may assist Kiel’s Café in achieving steady economic growth, increasing
profitability, and establishing a strong foundation for competitive advantage.

2.1.3 Outbound Logistics

Outbound logistics include actions that transport a product to a client via various intermediaries.
Material handling, warehousing, scheduling, order processing, transportation, and delivering to the
destination are examples of outbound logistics operations. Kiel’s Café may analyze and optimize its
outbound logistics in order to identify sources of competitive advantage and meet its business
growth objectives.
Because when outbound operations are managed in a timely and cost-effective manner, and product
delivery procedures have a minimal negative impact on quality, it maximizes customer satisfaction
and expands the firm's growth potential. When the items given by Kiel’s Café are perishable and
require immediate delivery to the end client, the company should place a premium on its outbound
value chain operations.

2.1.4 Marketing and Sales

At this stage, Kiel’s Café will emphasize the benefits and differentiators of the supplied items in
order to persuade customers that its offering is superior to rivals. Only creating a high-quality
product at an affordable price with unique characteristics can produce value till Kiel’s Café engages
in marketing and sales efforts. Salespeople and marketers are crucial in this situation.

Sales force, advertising, promotional activities, pricing, channel selection, quoting, and creating
relationships with channel members are some examples of Kiel’s Café marketing and sales
operations. The marketing funnel strategy may be used to structure the company's marketing and
sales operations. Marketing tactics can be push or pull in nature, based on the company objectives,
brand image, competition dynamics, and existing market position of Kiel’s Café.

Effective and strategically integrated marketing operations may help Kiel’s Café build brand equity
and differentiate itself from the competition. However, Kiel’s Café must avoid making misleading
promises regarding product features that the production staff cannot meet. It emphasizes the need
of ensuring coordination across various value chain processes.

2.1.5 Services
The pre-sale and post-sale services provided by Kiel’s Café will be critical in creating client loyalty.
Post-sale services are as crucial to modern customers as marketing and promotional efforts. In
today's digitally advanced world, the impact of negative e-WOM caused by bad support service
cannot be underestimated. To prevent tarnishing the brand's reputation, the firm should examine its
support operations and turn them into a vehicle for spreading positive word of mouth owing to
rapid, timely, and effective support services.

2.2 Secondary Activities

The major value chain operations are coordinated and facilitated by the support activities. Kiel’s Café
can also benefit from an examination of its customer service efforts, as stated below.

2.2.1 Firm infrastructure

Quality management, legal affairs handling, accounting, financing, planning, and strategic
management are all examples of business infrastructure operations. Kiel’s Café can optimize the
value of the whole value chain with effective infrastructure management. Kiel’s Café can exert
control over infrastructure operations (also known as overhead costs) in order to increase its market
position.
2.2.2 Human resource management
Kiel’s Café may assess human resource management by examining several HR areas such as
recruitment, selection, training, rewarding, performance management, and other people
management operations. Kiel’s Café may lessen competitive pressure through good human resource
management by focusing on the motivation, dedication, and abilities of its workers. The corporation
can also achieve its cost-cutting goals by comparing recruiting and training expenditures to their
proportional return. Kiel’s Café reliance on staff talent will heighten the relevance of this value chain
support activity.

2.2.3 Technology development

Almost all value chain operations in a modern, technologically sophisticated period rely on
technology assistance. Kiel’s Café must recognize the significance of technology advancement in its
manufacturing, distribution, marketing, and human resource activities. It is separated into two
categories: product and process technical development activities. Automation software, technology-
supported customer service, product design research, and data analytics are a few examples. This
category includes Kiel’s Café research & development department.

2.2.4 Procurement
Procurement in the value chain refers to the activities involved in acquiring inputs such as
equipment, machinery, raw material, supplies, raw material, and other items required for the
production of the completed product. Kiel’s Café should carefully analyze its procurement activities
due to their connection with many value chain activities in order to optimize the incoming,
operational, and outbound value chains.

As previously stated, recognizing the significance of all activities is required for the adoption of the
Porter Value Chain model. Kiel’s Café should identify areas where value may be created, cost
efficiency can be achieved, a differentiating foundation can be established, or processes can be
optimized after understanding the relative relevance of identified value chain activities.