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Value Chain

          The World Wide Web has greatly impacted the value chain of many organizations.  In addition to the primary activities of inbound logistics, production, outbound logistics, sales, and marketing maintenance, the Internet has also impacted the support activities of research and development, administrative infrastructure management, human resources management, and procurement.  Because these value-adding activities are important in maintaining a competitive advantage, organizations have had to use the Internet and other developing technologies to remain competitive (Daft, 2004).

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...K-Mart Corporation is one example of a retailer that needed to adapt to advancing technology in order to remain competitive in its industry.  Sales is one of the most important primary activities in the value chain for K-Mart and has changed rapidly due to the introduction of the Internet.  K-Mart’s response has included the introduction of an online store where customers may purchase some of the products available in brick-and-mortar locations.  Unfortunately, this online store is not very competitive when compared with the sites of retailers such as Wal-Mart and Target.  The online apparel department is very sparse, customers are unable to purchase many items that are available in traditional stores, and the site design is not as well developed as its competitors.

            For K-Mart, marketing is an extremely important business activity.  Due to the organization’s financial problems and subsequent bankruptcy, K-Mart has had to increase its marketing efforts in order to make consumers aware of their offerings.  The Internet has allowed K-Mart to create targeted electronic mail campaigns, attract customers to its online store, and promote the organization through advertising on related web sites.

            Research and development is a support activity that has been greatly impacted by the Internet.  K-Mart has had to incorporate the Internet into their research and development process due to the proliferation of Internet service providers and increasing amount of web users.  Research is more easily accomplished when the Internet is incorporated into research and development activities.  K-Mart is able to conduct consumer research by using online surveys and questionnaires.  In addition, K-Mart can conduct research into competitors’ activities by visiting their web sites and browsing through their products, viewing sale items, and becoming aware of other special services and promotions.

            Human resource management has certainly been impacted by the introduction of the Internet.  K-Mart is now able to attract candidates for both management and support staff positions using its company web site.  Job postings are also available online and can attract qualified applicants from a variety of locations.  This Internet presence allows K-Mart to give potential applicants company information, a description of available positions, and other information that is valuable in attracting a candidate to an organization.

            Procurement is another support activity that has been greatly impacted by the introduction of the Internet.  Because suppliers are now using the World Wide Web to offer their products to buyers, K-Mart has had to educate itself on how to use this new procurement method.  By utilizing the Internet, K-Mart is able to enter discount agreements with suppliers that may not be available with more traditional procurement methods.  This method of procurement can result in a positive impact on K-Mart’s bottom line, which is very important in the competitive retail environment.

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