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TRL AND
VALUE CHAIN
IDEAS FOR TODAY AND TOMORROW
TECHNOLOGY READINESS LEVEL
Entrepreneurship
Technology
√
Technopreneurship
Kewirausahaan
Entrepreneur: starts a new business based on new products and/or service needed
by the market, of economic and social value, looking out for opportunities and taking
calculated risks.
Definition
Kewirausahaan Berbasis Teknologi
Technical entrepreneur or “technopreneur:” starts a new business based on new products /
services needed by the market, generated from science, technology and engineering.
Teknologi
“Technology is a capability that can be used in a product”
TAHAPAN : INVENSI  PROTOTYPE 
PRODUKSI  INOVASI
Sumber : www.siks.nl/map_IO_Archi_2006/ocallaghan2.PDF
Invensi Prototype Produksi
Inovasi Teknologi
ROADMAP INKUBASI CV NANOTECH INDONESIA
BALAI INKUBATOR TEKNOLOGI
Prototipe sudah teruji
dalam suatu
lingkungan yang
relevan
Tahap 1
Prototipe
Mesin produksi
nanopartikel
PerkembanganProduk
Peningkatan aspek
teknologi dari proses
produksi secara mekanik
menjadi teknologi plasma
Tahap 2
Produksi skala
lab
Tahap 3
Scale up
• Optimasi kondisi
• Uji Produksi
• Pengujian Produk
• Pengembangan
Produk
Tahap 4
Komersialisasi
• Sertifikasi produk
• Pemasaran produk
• Manajemen Tim & BP
• Legalitas Usaha Tahap 5
Produksi Massal
• Produk diterima pasar
• Proses bisnis berjalan
• Terakses dengan
pendanaan
2013
Waktu
Produksi ZnO 15-
30 Kg/tahun
Kadar ZnO 99,90 % up
Ukuran: 80 – 250 nm
Kapasitas 900 kg/tahun
Sudah di uji jual 163 kg
selama 6 bulan
2012
Kapasitas yang ingin
dicapai : 6 ton/tahun
2009
2010
2011
20112010 2012 2013
- Riset pembuatan
Eugenol dengan
kemurnian 99 %
- Pembuatan
Eugenol dg
kemurnian 99,5 %
- Kapasitas 5
liter/batch
- Optimasi alat
fraksinasi
- Uji jual
- Standarisasi Produk
- Peningkatan
kemurnian 99,7 % -
99,9 % dengan
kapasitas produksi
200 liter/batch
- Legalitas perusahaan
- Produksi
massal
20112010 2012 2013
- Pembuatan
Business Plan
- Penjajakan
Mitra : PT
Leather
Chemical
- Penjajakan Mitra :
PT Sampe Wali
- Mitra : PT Mikata
Sukses Mandiri
- Update Business Plan
- Uji Produksi: Kapasitas
10 ton/thn
- Survey Konsumen &
Uji Jual: target  PT
Sinarmas Land
- Ekspansi
Pasar
- Perluasan
Pabrik
KONTROL TECHNOFERT
(MIKORIZA)
COMMERCIALIZATION DRIVEN
Linear market pull model (adapted from Rothwell [1994])
Linear technology push model (adapted from Rothwell [1994])
Technology Push
Market Pull
TECHNOLOGY READINESS LEVELS (TRLS)
Technology development and technology readiness levels (TRLs)
TRL table:
• Dikembangkan oleh NASA dan umum digunakan di Amerika Serikat untuk program
pengembangan teknologi untuk mengukur kematangan teknologi
• Untuk membandingkan tingkat persaingan teknologi dan evaluasi teknologi
9 stages of technology readiness levels – TRL 1–9
(ref: John C. Mankins -1995)
www.hq.nasa.gov/office/codeq/trl/trl.pdf
INVENTIONS AND TECHNOLOGY READINESS
LEVELS
• TRL 1: Lowest level of technology readiness. Research begins to be translated into applied research
and development. Examples might include paper studies of a technology’s basic properties
(proposal to funding agency).
• TRL 2: Invention begins. Once basic principles are observed, practical applications can be invented.
Applications are speculative and there may be no proof or detailed analysis to support the
assumptions. Examples are limited to analytical studies.
• TRL 3: Active research and development is initiated. This includes analytical studies and laboratory
studies to physically validate analytical predictions of separate elements of the technology.
Examples include components that are not yet integrated or representative.
• TRL 4: Basic technological components in the intersect areas are integrated in a similar fashion to
establish that they will work together. This is relatively “low fidelity” compared with the eventual
system. Examples include integration of “ad hoc” hardware in the laboratory.
• TRL 5: Fidelity of breadboard technology increases significantly. The basic technological
components are integrated with reasonably realistic supporting elements so it can be tested in a
simulated environment. Examples include “high fidelity” laboratory integration of components.
INVENTIONS AND TECHNOLOGY READINESS LEVELS
• TRL 6: Similar but not necessarily the same system, which is well beyond that of TRL5, is tested
in a relevant environment. Represents a major step up in a technology’s demonstrated
readiness. Examples include reliability and satisfactory performance characteristics in a high
fidelity laboratory environment or in a stimulated operational environment (operating range of
temperature, humidity, pressure etc).
• TRL 7: Prototype near or at planned operational system. Represents a major step up from TRL 6,
requiring demonstration of an actual system prototype in an operational environment. Examples
include testing the prototype in an mock-up of the final product.
• TRL 8: Technology proven to work in its final form and under expected conditions. In most
cases, this TRL represents the end of true system development. Examples include development
test and evaluation of the system in its intended environment to determine if it meets
specifications.
• TRL 9: Actual application of the technology in its final form and under mission conditions, such
as those encountered in operational test and evaluation. Examples include using the systems
under operational mission conditions.
INVENTION TO PRODUCT: TECHNOLOGY DEVELOPMENT,IP
Invention TRL 2
1.Invention notebook
2.Literature survey
3.Invention disclosure form
4.Identify patent attorney
5. Check IP rules/regulations
6.Provisional application
7.Start reduction to practice
8.Develop product ideas
9.Conduct market research
10.Identify and contact
potential sponsors for
product development
11. Sign non-disclosure
forms
12.Complete reduction to practice
13.Complete non-provisional patent
application
14. Assemble team to do further work
TRL 3
15. Start product development
16. Finish bread-board version
of product and show it to
potential customers
17.Obtain requirements from
Customers
18.Start industrial design and
packaging.
TRL4
19. Start manufacturing
Consideration, location
20. Identify suppliers, sub
Contractors
21. Permits and licenses.
22. Finish alpha-version
of product
23. Generate customer
Feedback
TRL 6
24. Beta-version of product
25. Start manufacture
26. Patent might be issued at
anytime.
PRODUCT
TRL 8
INVENTION TO PRODUCT: TIMELINE
0 36246 12 4818 4230
TRL 2
Invention
1. Notebook entry
6. Provisional application
7. Start reduction to practice
12.Complete reduction to practice
13. Complete non provisional
patent application (2-3 months)
14. Assemble team to do further
work
Start product
development
22.Finish alpha-version of
Product
23.Get customer feedback
TRL 8
PRODUCT
2.Literature survey
3.Invention disclosure form
4.Identify patent attorney
5.Check regulatory issues
8.Develop product ideas
9.Conduct market research
10.Contact potential sponsors
for product development
11.Sign non-disclosure forms
16.Finish bread-board
version
17.Obtain requirements
from customers
18.Start industrial design
and packaging
19.Start manufacturing
considering location
20.Identify suppliers,
sub-contractors
21.Permits and licenses
24.Beta-version of the
product
25.Start manufacture
26.Patent might be
issued anytime now
months
TIMELINE: WINDSHIELD WASHER NOZZLE
1998 20001999 20011999 2000
TRL 2. INVENTION
6. Provisional application
7. Start reduction to practice
12.Complete reduction to practice
13. Complete non provisional
patent application (2-3 months)
14. Assemble team to do further
work
Start product
development
22.Finish alpha-version of
Product
23.Get customer feedback
TRL 8. PRODUCT
1.Notebook entry
2.Literature survey
3.Invention disclosure form
4.Identify patent attorney
5.Check regulatory issues
8.Develop product ideas
9.Conduct market research
10.Contact potential sponsors
for product development
11.Sign non-disclosure forms
16.Finish bread-board
version
17.Obtain requirements
from customers
18.Start industrial design
and packaging
19.Start manufacturing
considering location
20.Identify suppliers,
sub-contractors
21.Permits and licenses
24.Beta-version of the
product
25.Start manufacture
26.Patent might be
issued anytime now
November
July October
October August July
Product concept
(2005)
Invention to product: corrosion health monitor
TECHNOLOGY AND BUSINESS INCUBATOR (TBI)
Technology/
I N C U B A T O R
Business/ Product
Innovation
HOW DOES YOUR ORGANIZATION CREATE VALUE?
• This isn't just a dry question: it's a matter of fundamental importance to
companies, because it addresses the economic logic of why the organization exists
in the first place
• The value that's created and captured by a company is the profit margin:
Value Created and Captured – Cost of Creating that Value = Margin
• The more value an organization creates, the more profitable it is likely to be. And
when you provide more value to your customers, you build competitive advantage.
A VALUE CHAIN IS???
• A value chain is a set of activities that an organization carries out to create value
for its customers.
Porter proposed a general-purpose value chain that companies can use to examine
all of their activities, and see how they're connected. The way in which value chain
activities are performed determines costs and affects profits, so this tool can help
you understand the sources of value for your organization.
ELEMENTS IN PORTER'S VALUE CHAIN
PRIMARY ACTIVITIES
• Primary activities relate directly to the physical creation, sale, maintenance and support of a product or service. They
consist of the following:
• Inbound logistics – These are all the processes related to receiving, storing, and distributing inputs internally. Your
supplier relationships are a key factor in creating value here.
• Operations – These are the transformation activities that change inputs into outputs that are sold to customers. Here,
your operational systems create value.
• Outbound logistics – These activities deliver your product or service to your customer. These are things like
collection, storage, and distribution systems, and they may be internal or external to your organization.
• Marketing and sales – These are the processes you use to persuade clients to purchase from you instead of your
competitors. The benefits you offer, and how well you communicate them, are sources of value here.
• Service – These are the activities related to maintaining the value of your product or service to your customers, once
it's been purchased.
SUPPORT ACTIVITIES
• These activities support the primary functions above. In our diagram, the dotted lines show that each support, or secondary,
activity can play a role in each primary activity. For example, procurement supports operations with certain activities, but it
also supports marketing and sales with other activities.
• Procurement (purchasing) – This is what the organization does to get the resources it needs to operate. This includes finding
vendors and negotiating best prices.
• Human resource management – This is how well a company recruits, hires, trains, motivates, rewards, and retains its workers.
People are a significant source of value, so businesses can create a clear advantage with good HR practices.
• Technological development – These activities relate to managing and processing information, as well as protecting a
company's knowledge base. Minimizing information technology costs, staying current with technological advances, and
maintaining technical excellence are sources of value creation.
• Infrastructure – These are a company's support systems, and the functions that allow it to maintain daily operations.
Accounting, legal, administrative, and general management are examples of necessary infrastructure that businesses can
use to their advantage.
• Companies use these primary and support activities as "building blocks" to create a valuable product or service.
USING PORTER'S VALUE CHAIN
• Step 1 – Identify subactivities for each primary activity
For each primary activity, determine which specific subactivities create value. There are three
different types of subactivities:
• Direct activities create value by themselves. For example, in a book publisher's marketing and
sales activity, direct subactivities include making sales calls to bookstores, advertising, and
selling online.
• Indirect activities allow direct activities to run smoothly. For the book publisher's sales and
marketing activity, indirect subactivities include managing the sales force and keeping customer
records.
• Quality assurance activities ensure that direct and indirect activities meet the necessary
standards. For the book publisher's sales and marketing activity, this might include proofreading
and editing advertisements.
STEP 2 – IDENTIFY SUBACTIVITIES FOR EACH SUPPORT
ACTIVITY.
• For each of the Human Resource Management, Technology Development and
Procurement support activities, determine the subactivities that create value
within each primary activity. For example, consider how human resource
management adds value to inbound logistics, operations, outbound logistics, and
so on. As in Step 1, look for direct, indirect, and quality assurance subactivities.
• Then identify the various value-creating subactivities in your company's
infrastructure. These will generally be cross-functional in nature, rather than
specific to each primary activity. Again, look for direct, indirect, and quality
assurance activities.
STEP 3 – IDENTIFY LINKS
• Find the connections between all of the value activities you've identified. This will
take time, but the links are key to increasing competitive advantage from the
value chain framework. For example, there's a link between developing the sales
force (an HR investment) and sales volumes. There's another link between order
turnaround times, and service phone calls from frustrated customers waiting for
deliveries.
STEP 4 – LOOK FOR OPPORTUNITIES TO INCREASE VALUE
• Review each of the subactivities and links that you've identified, and think about
how you can change or enhance it to maximize the value you offer to customers
(customers of support activities can internal as well as external).
STARBUCKS
PRIMARY ACTIVITIES
• Inbound logistics: This refers to the agents of the company purchasing coffee beans in Africa,
communicating the importance of quality standards in the coffee beans and building strategic
partnerships with suppliers.
• Operations: Starbucks is currently in over 50 countries, with both direct stores operated by the company
and licensing deals.
• Outbound logistics: The normal process is Starbucks selling their products in store without any
intermediaries. Recently, there are now retail products available in select supermarket chains.
• Marketing and Sales: There is no heavy investment in marketing, but specials and tastings are common,
especially when new stores open.
• Service: One of their main objectives is to provide superior levels of customer service.
SUPPORT ACTIVITIES
• Infrastructure: This is all of the general activities that are required to keep the stores operational, like management,
finance, legal support and government relations.
• Human Resources: There are a wide range of training programs available for staff, who are considered to be one of
Starbucks most important resources.
• Technological development: They make use of technology to save costs, and deliver a consistent tasting coffee,
anywhere in the world.
• Procurement: All the purchasing that is required to produce the end products, like the coffee beans, raw food items
as well as the buildings, and machinery.
• Based on the mix of activities above, Starbucks has capitalized on an international demand for delicious coffee, that
has guests coming back again and again to experience the superior levels of service, and a coffee that always tastes
great
THANK YOU

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Trl and value chain

  • 1. TRL AND VALUE CHAIN IDEAS FOR TODAY AND TOMORROW
  • 3. Entrepreneurship Technology √ Technopreneurship Kewirausahaan Entrepreneur: starts a new business based on new products and/or service needed by the market, of economic and social value, looking out for opportunities and taking calculated risks. Definition Kewirausahaan Berbasis Teknologi Technical entrepreneur or “technopreneur:” starts a new business based on new products / services needed by the market, generated from science, technology and engineering. Teknologi “Technology is a capability that can be used in a product”
  • 4. TAHAPAN : INVENSI  PROTOTYPE  PRODUKSI  INOVASI Sumber : www.siks.nl/map_IO_Archi_2006/ocallaghan2.PDF Invensi Prototype Produksi Inovasi Teknologi
  • 5. ROADMAP INKUBASI CV NANOTECH INDONESIA BALAI INKUBATOR TEKNOLOGI Prototipe sudah teruji dalam suatu lingkungan yang relevan Tahap 1 Prototipe Mesin produksi nanopartikel PerkembanganProduk Peningkatan aspek teknologi dari proses produksi secara mekanik menjadi teknologi plasma Tahap 2 Produksi skala lab Tahap 3 Scale up • Optimasi kondisi • Uji Produksi • Pengujian Produk • Pengembangan Produk Tahap 4 Komersialisasi • Sertifikasi produk • Pemasaran produk • Manajemen Tim & BP • Legalitas Usaha Tahap 5 Produksi Massal • Produk diterima pasar • Proses bisnis berjalan • Terakses dengan pendanaan 2013 Waktu Produksi ZnO 15- 30 Kg/tahun Kadar ZnO 99,90 % up Ukuran: 80 – 250 nm Kapasitas 900 kg/tahun Sudah di uji jual 163 kg selama 6 bulan 2012 Kapasitas yang ingin dicapai : 6 ton/tahun 2009 2010 2011
  • 6. 20112010 2012 2013 - Riset pembuatan Eugenol dengan kemurnian 99 % - Pembuatan Eugenol dg kemurnian 99,5 % - Kapasitas 5 liter/batch - Optimasi alat fraksinasi - Uji jual - Standarisasi Produk - Peningkatan kemurnian 99,7 % - 99,9 % dengan kapasitas produksi 200 liter/batch - Legalitas perusahaan - Produksi massal
  • 7. 20112010 2012 2013 - Pembuatan Business Plan - Penjajakan Mitra : PT Leather Chemical - Penjajakan Mitra : PT Sampe Wali - Mitra : PT Mikata Sukses Mandiri - Update Business Plan - Uji Produksi: Kapasitas 10 ton/thn - Survey Konsumen & Uji Jual: target  PT Sinarmas Land - Ekspansi Pasar - Perluasan Pabrik KONTROL TECHNOFERT (MIKORIZA)
  • 8. COMMERCIALIZATION DRIVEN Linear market pull model (adapted from Rothwell [1994]) Linear technology push model (adapted from Rothwell [1994]) Technology Push Market Pull
  • 9. TECHNOLOGY READINESS LEVELS (TRLS) Technology development and technology readiness levels (TRLs) TRL table: • Dikembangkan oleh NASA dan umum digunakan di Amerika Serikat untuk program pengembangan teknologi untuk mengukur kematangan teknologi • Untuk membandingkan tingkat persaingan teknologi dan evaluasi teknologi 9 stages of technology readiness levels – TRL 1–9 (ref: John C. Mankins -1995) www.hq.nasa.gov/office/codeq/trl/trl.pdf
  • 10. INVENTIONS AND TECHNOLOGY READINESS LEVELS • TRL 1: Lowest level of technology readiness. Research begins to be translated into applied research and development. Examples might include paper studies of a technology’s basic properties (proposal to funding agency). • TRL 2: Invention begins. Once basic principles are observed, practical applications can be invented. Applications are speculative and there may be no proof or detailed analysis to support the assumptions. Examples are limited to analytical studies. • TRL 3: Active research and development is initiated. This includes analytical studies and laboratory studies to physically validate analytical predictions of separate elements of the technology. Examples include components that are not yet integrated or representative. • TRL 4: Basic technological components in the intersect areas are integrated in a similar fashion to establish that they will work together. This is relatively “low fidelity” compared with the eventual system. Examples include integration of “ad hoc” hardware in the laboratory. • TRL 5: Fidelity of breadboard technology increases significantly. The basic technological components are integrated with reasonably realistic supporting elements so it can be tested in a simulated environment. Examples include “high fidelity” laboratory integration of components.
  • 11. INVENTIONS AND TECHNOLOGY READINESS LEVELS • TRL 6: Similar but not necessarily the same system, which is well beyond that of TRL5, is tested in a relevant environment. Represents a major step up in a technology’s demonstrated readiness. Examples include reliability and satisfactory performance characteristics in a high fidelity laboratory environment or in a stimulated operational environment (operating range of temperature, humidity, pressure etc). • TRL 7: Prototype near or at planned operational system. Represents a major step up from TRL 6, requiring demonstration of an actual system prototype in an operational environment. Examples include testing the prototype in an mock-up of the final product. • TRL 8: Technology proven to work in its final form and under expected conditions. In most cases, this TRL represents the end of true system development. Examples include development test and evaluation of the system in its intended environment to determine if it meets specifications. • TRL 9: Actual application of the technology in its final form and under mission conditions, such as those encountered in operational test and evaluation. Examples include using the systems under operational mission conditions.
  • 12. INVENTION TO PRODUCT: TECHNOLOGY DEVELOPMENT,IP Invention TRL 2 1.Invention notebook 2.Literature survey 3.Invention disclosure form 4.Identify patent attorney 5. Check IP rules/regulations 6.Provisional application 7.Start reduction to practice 8.Develop product ideas 9.Conduct market research 10.Identify and contact potential sponsors for product development 11. Sign non-disclosure forms 12.Complete reduction to practice 13.Complete non-provisional patent application 14. Assemble team to do further work TRL 3 15. Start product development 16. Finish bread-board version of product and show it to potential customers 17.Obtain requirements from Customers 18.Start industrial design and packaging. TRL4 19. Start manufacturing Consideration, location 20. Identify suppliers, sub Contractors 21. Permits and licenses. 22. Finish alpha-version of product 23. Generate customer Feedback TRL 6 24. Beta-version of product 25. Start manufacture 26. Patent might be issued at anytime. PRODUCT TRL 8
  • 13. INVENTION TO PRODUCT: TIMELINE 0 36246 12 4818 4230 TRL 2 Invention 1. Notebook entry 6. Provisional application 7. Start reduction to practice 12.Complete reduction to practice 13. Complete non provisional patent application (2-3 months) 14. Assemble team to do further work Start product development 22.Finish alpha-version of Product 23.Get customer feedback TRL 8 PRODUCT 2.Literature survey 3.Invention disclosure form 4.Identify patent attorney 5.Check regulatory issues 8.Develop product ideas 9.Conduct market research 10.Contact potential sponsors for product development 11.Sign non-disclosure forms 16.Finish bread-board version 17.Obtain requirements from customers 18.Start industrial design and packaging 19.Start manufacturing considering location 20.Identify suppliers, sub-contractors 21.Permits and licenses 24.Beta-version of the product 25.Start manufacture 26.Patent might be issued anytime now months
  • 14. TIMELINE: WINDSHIELD WASHER NOZZLE 1998 20001999 20011999 2000 TRL 2. INVENTION 6. Provisional application 7. Start reduction to practice 12.Complete reduction to practice 13. Complete non provisional patent application (2-3 months) 14. Assemble team to do further work Start product development 22.Finish alpha-version of Product 23.Get customer feedback TRL 8. PRODUCT 1.Notebook entry 2.Literature survey 3.Invention disclosure form 4.Identify patent attorney 5.Check regulatory issues 8.Develop product ideas 9.Conduct market research 10.Contact potential sponsors for product development 11.Sign non-disclosure forms 16.Finish bread-board version 17.Obtain requirements from customers 18.Start industrial design and packaging 19.Start manufacturing considering location 20.Identify suppliers, sub-contractors 21.Permits and licenses 24.Beta-version of the product 25.Start manufacture 26.Patent might be issued anytime now November July October October August July
  • 15. Product concept (2005) Invention to product: corrosion health monitor
  • 16. TECHNOLOGY AND BUSINESS INCUBATOR (TBI) Technology/ I N C U B A T O R Business/ Product Innovation
  • 17. HOW DOES YOUR ORGANIZATION CREATE VALUE? • This isn't just a dry question: it's a matter of fundamental importance to companies, because it addresses the economic logic of why the organization exists in the first place • The value that's created and captured by a company is the profit margin: Value Created and Captured – Cost of Creating that Value = Margin • The more value an organization creates, the more profitable it is likely to be. And when you provide more value to your customers, you build competitive advantage.
  • 18. A VALUE CHAIN IS??? • A value chain is a set of activities that an organization carries out to create value for its customers. Porter proposed a general-purpose value chain that companies can use to examine all of their activities, and see how they're connected. The way in which value chain activities are performed determines costs and affects profits, so this tool can help you understand the sources of value for your organization.
  • 19. ELEMENTS IN PORTER'S VALUE CHAIN
  • 20. PRIMARY ACTIVITIES • Primary activities relate directly to the physical creation, sale, maintenance and support of a product or service. They consist of the following: • Inbound logistics – These are all the processes related to receiving, storing, and distributing inputs internally. Your supplier relationships are a key factor in creating value here. • Operations – These are the transformation activities that change inputs into outputs that are sold to customers. Here, your operational systems create value. • Outbound logistics – These activities deliver your product or service to your customer. These are things like collection, storage, and distribution systems, and they may be internal or external to your organization. • Marketing and sales – These are the processes you use to persuade clients to purchase from you instead of your competitors. The benefits you offer, and how well you communicate them, are sources of value here. • Service – These are the activities related to maintaining the value of your product or service to your customers, once it's been purchased.
  • 21. SUPPORT ACTIVITIES • These activities support the primary functions above. In our diagram, the dotted lines show that each support, or secondary, activity can play a role in each primary activity. For example, procurement supports operations with certain activities, but it also supports marketing and sales with other activities. • Procurement (purchasing) – This is what the organization does to get the resources it needs to operate. This includes finding vendors and negotiating best prices. • Human resource management – This is how well a company recruits, hires, trains, motivates, rewards, and retains its workers. People are a significant source of value, so businesses can create a clear advantage with good HR practices. • Technological development – These activities relate to managing and processing information, as well as protecting a company's knowledge base. Minimizing information technology costs, staying current with technological advances, and maintaining technical excellence are sources of value creation. • Infrastructure – These are a company's support systems, and the functions that allow it to maintain daily operations. Accounting, legal, administrative, and general management are examples of necessary infrastructure that businesses can use to their advantage. • Companies use these primary and support activities as "building blocks" to create a valuable product or service.
  • 22. USING PORTER'S VALUE CHAIN • Step 1 – Identify subactivities for each primary activity For each primary activity, determine which specific subactivities create value. There are three different types of subactivities: • Direct activities create value by themselves. For example, in a book publisher's marketing and sales activity, direct subactivities include making sales calls to bookstores, advertising, and selling online. • Indirect activities allow direct activities to run smoothly. For the book publisher's sales and marketing activity, indirect subactivities include managing the sales force and keeping customer records. • Quality assurance activities ensure that direct and indirect activities meet the necessary standards. For the book publisher's sales and marketing activity, this might include proofreading and editing advertisements.
  • 23. STEP 2 – IDENTIFY SUBACTIVITIES FOR EACH SUPPORT ACTIVITY. • For each of the Human Resource Management, Technology Development and Procurement support activities, determine the subactivities that create value within each primary activity. For example, consider how human resource management adds value to inbound logistics, operations, outbound logistics, and so on. As in Step 1, look for direct, indirect, and quality assurance subactivities. • Then identify the various value-creating subactivities in your company's infrastructure. These will generally be cross-functional in nature, rather than specific to each primary activity. Again, look for direct, indirect, and quality assurance activities.
  • 24. STEP 3 – IDENTIFY LINKS • Find the connections between all of the value activities you've identified. This will take time, but the links are key to increasing competitive advantage from the value chain framework. For example, there's a link between developing the sales force (an HR investment) and sales volumes. There's another link between order turnaround times, and service phone calls from frustrated customers waiting for deliveries.
  • 25. STEP 4 – LOOK FOR OPPORTUNITIES TO INCREASE VALUE • Review each of the subactivities and links that you've identified, and think about how you can change or enhance it to maximize the value you offer to customers (customers of support activities can internal as well as external).
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  • 29. STARBUCKS PRIMARY ACTIVITIES • Inbound logistics: This refers to the agents of the company purchasing coffee beans in Africa, communicating the importance of quality standards in the coffee beans and building strategic partnerships with suppliers. • Operations: Starbucks is currently in over 50 countries, with both direct stores operated by the company and licensing deals. • Outbound logistics: The normal process is Starbucks selling their products in store without any intermediaries. Recently, there are now retail products available in select supermarket chains. • Marketing and Sales: There is no heavy investment in marketing, but specials and tastings are common, especially when new stores open. • Service: One of their main objectives is to provide superior levels of customer service.
  • 30. SUPPORT ACTIVITIES • Infrastructure: This is all of the general activities that are required to keep the stores operational, like management, finance, legal support and government relations. • Human Resources: There are a wide range of training programs available for staff, who are considered to be one of Starbucks most important resources. • Technological development: They make use of technology to save costs, and deliver a consistent tasting coffee, anywhere in the world. • Procurement: All the purchasing that is required to produce the end products, like the coffee beans, raw food items as well as the buildings, and machinery. • Based on the mix of activities above, Starbucks has capitalized on an international demand for delicious coffee, that has guests coming back again and again to experience the superior levels of service, and a coffee that always tastes great