Value Chain

I am going to call my CD business, Joe’s Music World. This is how I would utilize a value chain in this hypothetical business. To begin the upstream management part of the value chain always starts with the raw materials needed to produce and create an inventory. First I would collect together all old CDs that I have in my possession. I would save a step for this part by avoiding figuring the inbound logistics. On the other hand I would need to collect more materials besides just the CDs I own. I would send messages to people that I know and ask them if they own any old CDs that they would like to sell me or donate. I would work out a price for buying bulk amounts of CDs that is confortable with the seller and also leaves me room to make a profit. Logistically I would use a couple methods to collect these raw materials. If they are located proximally to myself I would travel myself in my car and collect the materials. If they are not close I would set up a shipping account with a shipping company to have the CDs shipped from wherever they are to me. Once I have collected the materials I will find a proper and organized way to store my inventory. I would designate a certain area in my home for my inventory. I would organize the CDs by genre of music, and within each genre I will have them in alphabetical order. There is also the opportunity to produce some CDs on my own. I already have thousands of songs stored in my iTunes, and would use these mp3 files to burn and create new CDs that I do not already have, allowing my inventory to grow larger.

            The next step is to start the downstream management, which is pretty much turning my inventory into revenue and profit. When someone purchases a CD I will go into my storage area, find the genre in which the CD falls, and find it alphabetically. To distribute my products, once an order is placed, I will look up the customers information to determine where the product will be going. Local orders I would be able to personally bring to the customer just as I would picking up a CD I had purchased for inventory. Non local order I will use the same shipping company that I use for bringing me the CDs, to ship them their CD orders.  To get my name out in the public I would use different marketing and advertising medias. With the explosion of social media and the easy access that most people in today’s world have with it, I would start there. I would create my own page for my company, allowing potential customers to see how my business works, and to see past customer experiences that may be posted. If I were to start making a good profit, I would also pay for advertising spaces in printed media, like newspapers, local magazines, etc. I would use my social media page as a base for customer service. Here I will listen to the feedback customers provide, listen to ideas on how customers would alter different aspects of the business for it to be more easy to use for them, and I will also be able to answer any questions that might arise. This is how I would use a value chain for my new CD company.