Coty UK Value Chain
Coty UK is a leading Wholesale and Distribution Company specialized in perfumes and beauty products. Effective value chain is important for Coty UK as it influences all operations and logistics of the company. Effective organizational performance depends upon value chain and allocation of resources. Value chain is extremely important for Coty UK because it helps the company organize and control its activities around the world. Decision-making has a great impact on company’s profitability and prosperity. The decision under analysis is “The ways Coty UK should use to improve its value chain and gain competitive advantage”
Coty UK Value Chain
Following M. Porter, the value chain is the sequence of activities, from start to finish, by which the product or service is transformed from an idea to a consumable form (Porter 1985). For instance, if the product is multimedia equipment, the chain starts with the materials (electronics parts and plastics), and end with delivery to a customer such as a manufacturer of multimedia equipment (Slack et al 2003). It is possible to say that if a firm is not fully integrated backward, the value chain would commence with the receipt of raw materials, and if forward integration is incomplete, the chain could end with manufacture and warehousing. According to Porter, “the main elements of the value chain are: firm infrastructure, HRM, technology and procurement. Primary activities involve: service, marketing and sales, outbound logistics, operation and inbound logistics” (Porter 1985, p. 35).
Proposed Improvements
The new challenge for Coty UK will be to balance financial spending and service quality, and provide a technology infrastructure that will anticipate the long-term trend to restructure the firm. Christopher underlines that organizations on the whole are indeed transitioning between states of structure as the combination of technology and customer needs continues to evolve (Christopher 2005). For this reason, technological improvements (automation of all processes) will help Coty UK to create a competitive advantage (Kotler and Armstrong 2008).
Empowerment of employees is another way to achieve a value focus in the value chain. It will be possible by eliciting suggestions from and delegating decisions to lower level employees. Innovation should be viewed as comprising three stages-need recognition, initiation, and implementation. Need recognition follows from the realization that something is wrong. Customers, employees, regulators, and other stakeholders could be the source of information about gaps in performance (Naylor 2002). Marketing Research should be the organizational function. It will help Coty UK anticipate possible market changes and react effectively to competitor’s actions (Kotler and Armstrong 2008).
Christopher underlines the importance of initiation in value chain. Initiation, or the generation and testing of new ideas, is typically the purview of R&D while implementation is assigned to Operations (Christopher 2005). There is often a separation between the need recognizers and initiators on the one hand and implementors of innovation on the other. For instance, while overall productivity has remained high in the United States over the past four decades (whether measured against input measures of labor hours or dollars of capital invested) a continuing focus on productivity has served to make production an inward looking function, content to develop techniques to increase outputs or lower costs, or both. Following the same strategy Chief Executives can drawn in far greater numbers from the ranks of Marketing and Finance professionals than from a shop floor persuasion, have not encouraged production people to look at or deal with, the external environment (Christopher 2002).
Coty UK should introduce customer relationship management (CRM) system to meet heightened customer expectations and face market competition. In general, CRM emphasizes the use of information technology in managing customer relationships. On the one hand, advances in database technology have made it possible to know and segment customers in ever more creative ways (Baudin, 2005). By Coty UK, data warehouses can be used to store and search vast amounts of data. Data mining and modeling techniques revealed otherwise ‘invisible’ patterns of customer behavior, which can be trans¬lated into customer-specific marketing strategies. With its foundations in Software’s CRM solution, CRM reinforced the view that marketers manage, and businesses win/lose – customer relationships, not customers. As the most important, it can cover such areas as accounting, manufacturing, warehousing, field service, and shipping systems. This solution also included direct sales, sales through indirect channels such as distributors, and Internet sales using electronic commerce. Services are provided via a range of media, including telephone, fax, mail, the Internet, various mobile devices, and face-to-face interaction (Christopher 2002).
HRM- training and development of human resources is the main priority of Coty UK. The company should invest in human resource and training. For example, selection techniques (screening, testing, interviewing) assess the complete person, how well he or she meshes with the company’s value creation process, and their ability to absorb and see many points of view (Baudin, 2005). In addition to productivity, quality, and responsiveness, an important method of evaluating people is based on their ability to take a holographic view of the firm. Rewards are based partly on the variety of skills learned or number of jobs performed satisfactorily. Training programs, in addition to targeting and teaching specific skills and techniques, also help supplement selection and appraisal strategies by building awareness and support of the holistic nature of the firm’s value mission (Baudin, 2005).
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