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Value Chains Essay

1378 words - 6 pages

Value Chains are one of the most important aspects in any business. This pertains to keeping everyone happy and knowing what you can do to keep everyone satisfied and ready to remain loyal. Often times we see company’s who have done their homework and thrive on doing what is needed to keep their company running smoothly and with less overhead than others in the industry. It remains a constant in many business managers’ minds that they have the ability to outsource their work in order to cut costs and keep their revenues climbing.
In order for you to better grasp the concept of value chains you must first be familiar with the definition of value chain, and outsourcing. As these definitions will allow you to understand fully what value chain is all about. Value chain is defined by businessdictionary.com as “Interlinked value-adding activities that convert inputs into outputs which, in turn, add to the bottom line and help create competitive advantage”. While value chain is important there are underlying terms that mean just as much when it comes to dissecting the value chain and its significance among different industries. Outsourcing is just as important and is defined as “purchasing (goods) or subcontracting (services) to an outside supplier or source” according to dictionary.com. I believe that these definitions are extremely important in the success of any business. Bottom line is that the general success of the company is reflective of the actions taken to promote outsourcing and decline any excess and unnecessary overhead.
With a service company like a major airline, there is always room for improvement. Major elements of the value chain that can be outsourced are vital to enhancing the efficiency and sustainability of companies. A few important elements are aircraft acquisition, aircraft maintenance and clean up, customer service, ticketing, stock control and Human Resources (HR). The reason that these specific areas are the most important is because they are generally what the customer will see or deal with when they are using the airline. For instance stock control deals with ensuring that the aircraft has enough beverages, snacks, pillows, blankets, and paper products to ensure the consumers satisfaction with their flight. Aircraft acquisition deals with how and where the company purchases planes from. As a company there is a need to control where products or aircrafts in this case are purchased, because ultimately they are investing into their business with each new aircraft. In turn this means it is important to ensure they are receiving the best aircraft for the best price. Aircraft maintenance and clean up is important as well because the companies need to ensure that their aircrafts are kept clean and in working condition so that they do not lose money from consumers. Customer service is an important element in the value chain because all consumers deal with this department at least one time or another while using the airlines...

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