Value Chain

 I have decided to start a company that uses a web-site to allow students to buy and sell CDs. It is important to evaluate the value chain of the new firm. A value chain is a series of activities that include inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service. The site will purchase CDs from sellers; the CDs are the raw materials. The items will be shipped in pre-paid envelopes that will be sent to the seller. The item will then arrive at the warehouse where it will be processed. The CD will be cleaned and inspected for defects upon passing inspection it will be cataloged, stored and listed on the site for purchase. After the CD is stored customer service will pay the seller either electronically or via check. If the CD is found to be defective it will be sent back to the seller without payment. This covers warehouse and production. Customers will be able to search through the inventory available by album title, artist name or genre. Customers can make selection and choose to pay with a credit card, debit card or via PayPal. The web-site will be marketed using a variety of internet advertisements as well as ads in school papers. Once a customer makes a purchase it will located in the warehouse and shipped in a flat rate envelope. This business plan outlines all of the steps in the value chain as required for the assignment. If I were to start this sort of business I would use a more streamline process which I have described below The site will be designed so students can directly buy and sell to each other so my business will not need to take possession of any goods. We will charge a listing fee to all the buyers. Students will pay using the web site and the seller will be paid electronically or by check the sale amount minus the listing fee. Sellers will once the buyer receives the CD and confirms it was the CD listed. By not taking possession of any CDs we have can keep costs low and increase the efficiency of the business. The firm will focus on customer service and marketing. The wed-site will use an aggressive advertising campaign involving internet ads, advertisements in student newspapers and coupons for both buyers and sellers. The customer service department will ensure the satisfaction of both the buyers and sellers respectively. Sellers will be rated by the buyers on characteristic such as honesty, mean was the CD advertised the CD received, and timely delivery. The rating systems will help to stop sellers from taking advantage of buyers. The prices will be set by the seller and can be change at any time before the item is purchased. The market will determine that price, if a seller has priced the CD to high no one will purchase it, and the seller will lower the price in order to sell. By using this method the firm need not take possession, store, or ship any goods, it can act as a middle-man while ensuring customer satisfaction.