VALUE CHAIN
The value chain helps us to understand how the company creates value and has five primary activities. The first primary activity in the value chain is inbound logistics, which includes warehousing, inventorying, and housing of the company’s raw materials. For Preferred Care at Wall, their inbound logistics system would be the supply closet and storage room where they keep all the supplies necessary for the nursing home and for rehabilitation. Another primary activity is operations. Operations are procedures for converting raw materials into a finished product or service. So, the inputs come in and they are processed and then when completed, are made into outputs. The operations for Preferred Care are the nurses and other workers who are assisting the elderly with daily activities at the site. All activities to distribute a final product to a consumer are considered outbound logistics, another primary activity. This includes delivery of the product but also includes storage and distribution systems and can be external or internal. For the nursing home, this would include transportation to and from activities for the elderly since this is a service. Marketing and sales are the fourth primary activity in the value chain. These strategies are put in place to enhance visibility and target appropriate customers. Advertising, promotion, and pricing are all included in marketing and sales. Marketing and sales are activities that would help convince a consumer to purchase a company’s product or service. At Preferred Care, they use multiple pamphlets and brochures to market themselves as well as television commercials that are inside of hospitals and adult communities. Customer service is the fifth and final primary activity in the value chain. This includes activities to maintain products and enhance consumer experience—customer service, maintenance, repair, refund, and exchange. For this nursing home, it would include satisfaction guarantees, or insurances as well as testimonies.
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