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Case study: Latureae business model

Introduction

Latureae is a company that deals with health and wellness products in the Australian market. The company takes in raw materials form a bank of 2000 suppliers to create products that take care of 100000 customers a week. This is possible because the company has good relationships with supermarkets, specialist health food stores, and health care professionals. Thus they link it to a wide customer base making it ideal to manufacture products that are in massive demand. This analysis looks into what is it that propels the business and what is it that can be done to even better its activities and services.

I will look at the primary activities of the business, the secondary activities, and subactivities as well as any links between the activities. I will then look at possible opportunities for Laturaea to employ and better their services.

The primary activities

The company has a broad range of primary activities through its processing chain that makes it possible to serve the customers with the end products which are healthy and nutritional supplements. The activities include the following:

Inbound logistics

The company has a number of all activities that it undertakes to create its full range of products. It undertakes the sourcing of raw materials from its customers whereby it uses different means of transport like the trucks and bikes to bring the materials to the production floor. It in makes use of trucks bikes and different means to ensure that the supplies reach the company on time and in the best natural condition.

The company utilizes a set of cooling facilities as most of the raw materials are green plants. This keeps them from going bad (Bischoff, 2011). Given that the company has over 2000 suppliers in Australia, it ensures that it stays in good relations with them which are the main contributor of value creation.

The subactivities include maintaining the trucks by servicing them and replacing worn out parts as well as training the drivers on the changes in the routes of picking the supplies.

Production

This is the process through which the company processes the raw supplies into their finished healthcare products. Here the company conducts activities such as quality checking. This ensures that they are of good quality and hygienic. The processing will entail measuring the quantities per production amount. Also in the reduction process, the company conditions the working machines so that they may function based on the incoming materials and the desired outcome.

Subactivities here include setting up the production machines through cleaning and repairs as well as setting up hardware used in the operating systems.

So as to ensure that there is value creation at this point of production, the setting of the operating systems of machines is the main factor here.

Outbound logistics

Latureae after it has completed its manufacturing of the products; it has to get the products to the market. The company has a storage system where the products stay waiting for their transportation and delivery. The company works on the storage system to ensure that is clean, proper temperature, more spacious and hazard free. The company also has an inventory management system that ensures all the products are stable in terms of quantity s that the storage space does not become so less that it becomes very difficult for movement activities to take place.

The company has a fleet of delivery trucks and pickup cars that take the products to the supermarkets, the wellness centers as well as do deliveries for customers who make online orders. The subactivities s includes working on delivery charts based on the incoming orders and packaging the products based on the desired quantities.

Value is created by the delivery systems which have to be maintained to ensure that the deliveries are seamless and very efficient.

Marketing and sales

So that the company expands its services to reach a larger market, it invests in marketing as well as sales activities. The company uses its solid e-commerce platform to market itself to the target market. This company's marketing department takes care of its advertisements in the local media and social media channels (Reese, Waage, Gerwin & Koch, 2016). It has hire sales reps that get out into the prospective market to get customers to understand and buy their products. Sub-activities here include researching on which prospects are more convertible making huge profits.

The value is created by making sure that the company is differentiated and stand out of the competition.

Services

Here the company has to offer services of its customers that will ensure that the relationships with them last for long. Some of the services include replacement of broken or badly delivered orders, exchange of orders and offering technical advice to the customers.

The secondary activities

Latureae in its model has stated that is a national manufacturing, distribution, and an advisory firm. Thus these elements of company management require physical locations within which they are conducted. This brings me to a list of activities that I will refer to them as support activities and are as follows

Human resource management

Under human resource management, the company hires employees who help it in the production operations. It also trains the employees to ensure that they understand fully what they are required to do on their respective assignments. The company is offering education or skill training to its existing employees to ensure that they understand the latest developments in the company systems. The need to have very competent staffs who serves the company for a very long period of time is what creates the value

Firm structure

The company is innovating better ways to package its products. This is to ensure that they use very less material while ensuring that the safety and quality of their products are not compromised. This will reduce costs while ensuring that more funds are allocated to research and development (Reese, Waage, Gerwin & Koch, 2016). What creates value here is the need to have an environment that supports work and employees

Technology development

Latureae is working constantly developing new innovations that will see it having new and professional product range. This will help its products have a wide selection of products that are going to handle the different health issues that they have. Also, the company is also looking at ways of producing technological wearable as they are the current frontier in the market. Through the use of internet like social media to conduct marketing, the company has been able to make extra large volumes of sales.

Subactivities here include purchasing as well as the installation of the modern IT software and hardware which enables the researchers as well as the IT staff to come up with new systems for the company.

Therefore through innovation and optimizations, the company is able to adapt as well as look for more technological resources to help in the production process.

Procurement

So that a product may be produced and then made sure that it reaches the market, there are so many things that are being done to ensure that the processes are very smooth and without much delays. The company therefore in part if it’s daily operation has the responsibility of talking to its large pool of suppliers in terms of managing the relationships (Porter, 2004). The company also has to source for quality and affordable prices for its raw materials and this means that it has to negotiate with its suppliers. Subactivities here include updating the delivery notices, updating the respective journal accounts and verifying the inventories.

Given that it has to deal with companies that are the business that forms part of its customers, the company has to get into purchase agreements with the acquired customers. The suppliers who comply with the purchase agreements are required to be paid promptly and thus makes the company to work on its payments system every time.

Links between value creation and subactivities

Looking at the business model of Latureae, I can account for just a few links to value creation and the subactivities. Looking at most of the primary activities as well as the secondary activities, most of the implementations are possible when the data is evaluated and found out that a certain need requires which can be solution. Through the analysis of trends and establishing any existing loopholes, they need to increase sales, they need to reduce supply cost is based on actual real data.

Conclusion

In summary, it can be seen that latureae is successful to develops its products and services as per porter’s value chain model focusing all primary and secondary activities. To be successful in market they focuses on new advancement and launching of natural health products, increase online sales volume, proper data management system. Therefore, every organsation should use porter;s value chain model to maximize the value offered to customers.

References

Bischoff, A. L. (2011). Porter's value chain and the rea analysis as an accounting information system. Place of publication not identified: Grin Verlag Ohg.

Porter, M. E. (2004). Competitive advantage: Creating and sustaining superior performance. New York: Free Press.

Reese, J., Waage, M., Gerwin, K., & Koch, S. (2016). Value chain analysis: Conceptual framework and simulation experiments.

Robben, X., & Probert, C. (2015). Michael Porter's value chain: [increase value and beat the competition].

Schmitz, H. (2005). Value chain analysis for policy-makers and practitioners. Geneva: International Labour Organization.

Nhyma Pakhrin Tamang

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Nhyma Pakhrin Tamang

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