Value Chain Analysis: Drone Racing

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Introduction
This is a report aims to examine a new business opportunity namely Drone Racing. We will be identifying business goals and objectives, and how to achieve such goals. Particularly we will be looking into the business’ potential internal and external network, how to leverage such value chains i.e. the operations strategy. And how are we going to measure the overall performance of the business?
We will also be identifying risks (and how to control such risks) in all aspects of the business including the internal and external networks, internal operational processes and delivery of the product itself.

Value Chain
The purpose of this specific value chain analysis is to identify Drone Racing’s potential 1st and 2nd tier Stakeholders,
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Prioritizing and focusing on the business objectives, that have the biggest impact; with scarce resources there will need to be trade-offs in regards to such objectives i.e. Quality, cost, flexibility, time and innovation (Cai & Yang, 2014). What this implies is we must focus and excel in a few limited aspects of value creation (Treacy & Wierema, 1997).
Specializing on our comparative advantages; creating high quality racing drones. We then outsource other functions i.e. retail and sales and a majority of the manufacturing; taking advantage of external firms’ comparative advantages and thus maximizing the overall efficiency of the entire value chain (Hunt & Morgan, 1995).
Identified by Prester (2013), quality is seen as the top differentiating factor associated with the ‘top manufacturers’. This implies that we produce a consistent and dependable product that performs. To achieve this we look to the quality of our supplier goods and the quality of internal manufacturing processes and implement relevant controls to achieve such consistency from end to
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the ratio of faulty inferior items versus total output. We then determine the underlying source of that fault e.g. incorrect placement of lighting, or non-compliant goods. As well as what department, and what processes have been involved in the creation of that product. We can then review current internal processes to identify problem processes and/or visit re-training of workers. This is ‘fault prevention’.
Once the product reaches the market, we must then implement financial measures. We must measure the ability of our business development and account managers. BDMs’ success, will be measured with number of new retailers taken on per month. Account managers will be measured on both financial and quality measures (in terms of service): Retention ratio – the number of new retailers acquired versus the number of partnerships lost per month. Measure account managers’ ability to; maintain relationships and negotiate contracts. This will be done by keeping a database of current retailers in contrast to new

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