Question & Answer: Use Porter's Value Chain Analysis coupled with the VRIO framework analysis to determine the extent to…

Expert Answer

Value Chain Analysis of Delta:

Primary Activities:-

(1) Inbound Logistics – The Top Management of Delta is very carefully selected; they are people with a proven track record and extensive industry experience.

(2) Operations – Executive VP and COO Steve Gorman looked after worldwide operations of Delta and he was successful in significantly improving operational reliability resulting in elevated ranking for the airline in the areas of punctuality, efficient baggage management and others.

(3) Outbound Logistics – It uses a Hub-and-Spoke Model to cater to customers in major markets across the globe.

(4) Marketing and Sales – It makes use of Joint Ventures and Strategic Alliances for marketing and sales of its services.

(5) After-Sales Service – The Top Management ensures that the passengers are looked after properly in case of flight delays or cancellations.

Secondary Activities:-

(1) Firm Infrastructure – The company has large office space and even a Flight Museum of its own.

(2) Human Resource Management – Top Management promotes diversity and inclusiveness in the workforce.

(3) Technology Development – The company invests around $ 250 million annually on technology.

(4) Procurement – Delta bought data and intellectual property rights related to its passenger reservation systems from Atlanta-based Travelport in 2014.

VRIO Framework Analysis of Delta:

The computer-based ticket reservation system of Delta was highly valuable to satisfy market demand; also its technology is proprietary and hence rare; its technology has been difficult for competitors to copy; lastly, the top management had good organizing capabilities in the form of debt restructuring, establishment of proper control mechanisms and others leading to the top position for the company in 2011 and 2013 in “Most Admired Airlines List” of Fortune.