The first type of model takes into account the business activity of process participants within one enterprise or region. For example, for a small company that operates exclusively usa phone list in one locality, a typical CSC should be used. The same model is used in a large corporation whose business is conducted on the territory of one state.
Global Value Chain
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Researchers at Duke University (USA) consider the global CVC as a business activity and its main participants, which are distributed among individual companies and countries. An example of such a value chain is the Starbucks model. Within the framework of this CVC, coffee beans are supplied from various countries, and the finished product is distributed throughout the world.
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Level of detail in value chains
The management of the value chain, taking into account the set objectives, can be visualized with different levels of detail. For example, business analyst Ben Thomson in his article compares the positions of Amazon and Walmart corporations within the framework of the CSC, focused on satisfying consumer demand in retail sales.
Walmart's core business is wholesale purchasing, distribution, and retail stores. The value chain in this case includes:
Purchasing products at wholesale prices from suppliers.
Distribution of goods using specialized centers, logistics infrastructure and processes aimed at maintaining the quality of perishable products, delivery of goods to stores.
Satisfaction of end consumer demand occurs through Walmart retail stores.
Walmart company
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Amazon has developed an alternative model for meeting retail demand:
At the initial stage, products are purchased at wholesale prices from suppliers.
Purchased goods are placed on their own online platform using marketplace technology. This process is not represented in Ben Thompson's diagram, but this connection between Supply and Amazon.com should be added, since the percentage of third-party sellers in Amazon's total GMV (gross merchandise value) in 2018 was at 58%).
Satisfaction of consumer demand is achieved through interaction between site visitors and the Amazon.com online storefront, where orders for the desired products with delivery are placed.
To organize timely delivery of goods, it is necessary to coordinate the activities of distribution centers, duplicate stock, clearly organize processes, starting from the registration of an application until the moment the product is received by the client, and cooperate with other logistics companies.
The significant differences in the integration of Amazon and Walmart into the CSC are due to the different tasks in trade for which they were created. Later, the enterprises developed on the basis of the initial models (purchase of products, books, and later disks and other products).
Currently, the positions of companies in the CSC influence their ability to quickly and effectively enter specific new platforms.