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Review the information in Illustration Capsule.1 concerning Boll &Branch´s average costs of producing and selling a king-size sheet set, and compare this with the representative value chain depicted in Figure 4.3. Then answer the following questions:
a.- Which of the company´s costs correspond to the primary value chain activities depicted in figure 4.3??
b.- Which of the company´s costs correspond to the support activities described in figure 4.3??
c.- What value chain activities might be important in securing or maintaining Boll & Branch ´s competitive advantage?? Explain the answer.
ILLUSTRATION CAPSULE 4.1 The Value Chain for Boll& Branch ce A king-size set of sheets from Boll & Branch is made from 6 meters of fabric, requiring 11 kilograms of raw cotton. Raw Cotton Spinning/Weaving/Dyeing Cutting/Sewing/Finishing Material Transportation Factory Fee Cost of Goods Inspection Fees Ocean Freight/Insurance Import Duties Warehouse/Packing Packaging Customer Shipping Promotions/Donations Total Cost Boll & Brand Markup $28.16 12.00 9.50 3.00 15.80 $68.46 5.48 4.55 8.22 8.50 15.15 14.00 30.00 $154.38 About 60% Boll & Brand Retail Price Gross Margin” $250.00 $95.62 Source: Ac 2014, www.wsj.com/articles/SB100014240527023037 25404579461953672838672 (accessed February 16, 2016) 102
Expert Answer
a Which of the company’s cost correspond to the primary value chain activities depicted in figure 4.3?
these are fabric costs, trim and hardware costs, duty and shipping costs.
b Which of the company’s cost corresponds to the support activities described in figure 4.3?
labor costs
C:- In order to obtain greater customer value and thus attaining the competitive advantage the firm has to focus on research and development and meeting the customer’s requirements. The firm has also to focus on distribution and supply chain to facilitate the products to the customers
