VALUE CHAIN ANALYSIS

Value chain analysis is a tool that helps businesses understand the activities that go into creating a product or service, and how these activities can be managed to create the greatest value. This analysis is typically divided into two main categories: primary activities, which are directly related to the creation, production, and distribution of a product or service, and support activities, which provide the infrastructure and support needed to enable primary activities.

In the case of Alibaba, a Chinese e-commerce company, value chain analysis can be used to understand the various activities and processes involved in its business model. Some examples of primary activities for Alibaba might include:

1.  Inbound logistics: Alibaba sources products from a variety of suppliers around the world, and manages the logistics of importing and storing these products in its warehouses.
2.  Operations: Alibaba operates an online marketplace that connects buyers and sellers, and provides a range of services to facilitate transactions, such as payment processing, dispute resolution, and delivery coordination.
3.  Outbound logistics: Alibaba coordinates the delivery of products to customers, either through its own fulfilment centres or through third-party carriers.
4.  Marketing and sales: Alibaba uses a range of marketing and sales channels, including online advertising, social media, and partnerships with brands and retailers, to reach and acquire customers.

Support activities for Alibaba might include:

1.  Infrastructure: Alibaba operates a complex network of servers, storage, and other technical infrastructure to support its online marketplace and other services.
2.  Human resource management: Alibaba employs a large workforce of engineers, salespeople, and other staff to support its operations.
3.  Technology development: Alibaba invests in research and development to improve its products and services, and to stay ahead of competitors.
4.  Procurement: Alibaba manages its relationships with suppliers, negotiating contracts, managing inventory, and ensuring timely delivery of products.

By understanding the various activities and processes involved in its business model, Alibaba can identify opportunities to create value for its customers, and optimise its operations to maximise efficiency and profitability.