Value Chain Management
It is always been the goal of every businessman to minimize their operational costs to maximize their profits. Having the optimal profits of the business would mean a capital for possible expansion of the company’s operation or better yet improve their operations by investing into new machineries. Because of this, entrepreneurs are constantly searching for new ways in which their company could cut costs and put more efficiency on their production line.
Different “twists” in the organizational structure and the like are sometimes tried by top managers in order to attain high level of efficiency and effectiveness. Purchasing of cheap yet high quality raw materials is also one of the ways that companies result into to cut costs. If the company being discussed has the power to monopolize the market, then, it can set the price of their product higher in such a way that they could earn the extra profit since they have the power to dictate the market price of the product.
Some are resulting to cartel in order to avoid competition and at the same time having the power to charge higher prices. But some businesses, strange as they may seem, are use to hire only one or two managers on their every store branch just to cut costs. This strategy would definitely turn down their operational costs but is still very risky since the success of the business will now depend more on the competitiveness of the manager. Based form contemporary business management, a store is oftentimes supervised by more than two managers to perform all the functions and duties well.
Now the question is how does Value Chains such as Big Lots and Value City able to operate with only one or two managers that supervises the operation of the stores? It is therefore important for us to understand how this strategy works to identify if whether it can be used by other business entities. This paper aims to discuss how Value Chains operates with only one or two managers just to cut operational costs of the company. At the end of the paper, it is expected that the reader of this paper to understand how the said kind of business operation structure works.