Value Chain Analysis of ABB PBS for Power Plant- myassignmenthelp

Question: Discuss about theValue Chain Analysis of ABB PBS for Power Plant. Answer: Introduction ABB and PBS were different entity involved in the contactor business of turbines, power plant, boilers and others. Both the business came into a joint venture when PBS agreed with the ABB proposal in 1992. During the venture ABB owned 67 percent of the share and PBS owned 33 percent of shares of the company. PBS on one hand contributed their land, plants and employees in the joint venture, while ABB gave financial support and modern technologies to the company. The joint venture included all kinds of boilers, turbines, power plant and the plant of PBS in Mikulov that made turbine blades. The reason for choosing this case study is the strong channel of the company after the venture was formed. Their operations are unique as some of them are dependent on others while others are their own functions (Gereffi Fernandez-Stark, 2016). The report discusses about the value chain analysis of ABB PBS after the venture. It further discusses about both the primary and support activities in the v alue chain analysis. Value Chain Analysis of ABB PBS Primary Activities of ABB PBS Inbound Logistic Outbound Logistic Operations Marketing and sales Services Importance It is the raw materials and other important tools that the company purchase for producing the final goods It decides the final quantity of goods that the company is producing and offering for sale in the market It is important because it decides the main activities of the business It helps in generating revenue and increasing brand value of the company It helps in attracting new customers for the organization and retain the existing customers of the business (Olson, 2014) Strength The joint venture of ABB PBS has inbound logistic of external services division, information system, physical capital, land and plant equipment Both ABB PBS served products as outbound logistic such as power generation, turbines, boilers, internal service division that offered maintenance and repair service business. Export accounted for more than quarter of the total orders The main operation were to develop turbines, boilers, steam line boilers, and to offer services like maintenance and repair Was assisted by the sister company of ABB in offering sales network opportunities. Owned a vice president of sale to carry out all the sales activity and also an export sales team. Offering repair services to the customers and providing power to huge industries from its power generating plants Weakness Failure after two years as external service division started functioning as a separate business. Technology advancement lead to inability of the employers to perform their task efficiently. Huge competition and losing share of repair services. Increase in cost due to high competitions. Orders for boilers reduced gradually after two years of venture Failed to perform their services gradually after two years of the venture. External service division failed with the aim of functioning as a separate business. Did not carry out any strong marketing and advertising activities to increase their brand name as a joint venture. it sales team also started to decline its services after two years of successful operation Failed to offer all kind of service to the customers after two years of operations because of lack of support and service generation came below 10 percent of the set goals. Table 1: Primary Activities Source: (Darmawan, Putra, Wiguna, 2014) Support Activities of ABB PBS Procurement Technology development Human Resource Management Firm infrastructure Importance Helped the company in setting a new business successfully by procuring the services and facilities from each other Important for the organization to generate services efficiently and also to compete successfully in the business. Helps in hiring employees for the business to carry out work efficiently for every division of the business. These are the capital, finance and others that helps in carrying out the functions of the business efficiently and support long term growth (Alcacer Delgado, 2016) Strength ABB PBS has procured the value of land, employees and equipment from the PBS and ABB offered financial support and technologies to the business ABB contributed the technologies to the business and the joint venture always played a significant role in technological development. The joint venture benefitted on some ground from the merger from the development of the new steam turbine lines. The joint venture also benefitted on various other variables such as productivity and inventory due to advanced technology The human capital restructuring of ABB PBS included training the already existing employees about the new technologies rather than hiring new employees. Training the employees about the technology and English language The business had a very strong financial performance for the two years. Export revenue increased more than quarter of expected earnings. It also had a strong infrastructure in innovation and new technology adoption. Weakness The business failed to procure sufficient amount of employees from the ABB sister company. Most of the employees of PBS did not join the joint venture The company failed to realize the importance of technology till the mid-1996 and the technology development was very slow till then. There is also a lack in the number of engineers to use the advanced technology. This made it difficult for the business to hire new technology easily. However, the company started losing employees due to problems in human resource such as longer time of pay of incentives, profit sharing was low for some workers and low bonus to some bonus-worthy employees. The financial strength of the business fell after the two years and the company also started to lose its expertise on external services and information system. Finance also decline due to lack of demand for boilers. Table 2: Support Activities Source: (Casadess, 2016) From the above analysis the Value Chain analysis of ABB PBS that showed all its strength and weakness depending on its various activities such as inbound logistics, outbound logistic, marketing, operation and services (de Souza Mrcio de Almeida, 2013). However the condition of these factors depends directly on the support activities of the business such as its procurement from the joint venture, human resource management, and technology condition and infrastructure development. Recommendation From the above analysis it can be seen that the joint venture that took place between ABB and PBS was successful for the first two year and slowly started to decline thereafter. This was because some of the lack of support from the parent company of ABB and PBS. The company should also conduct a better marketing strategy to market its new venture and create maximum brand value. This will help them create a better brand recognition of the new venture and also help them attract better investors, technology and better customers. Moreover it is also important the company hire some educated and trained employees that can use new technologies rather than training the existing employees. Conclusion From the above analysis it can be deduced that the joint venture that took place between ABB and PBS proved to be successful. In the venture ABB owned the maximum share compared to PBS depending on the value of things they offered during the venture. the product line offered by PBS such as boilers, plants, turbine and other and technologies and finance offered by ABB helped the venture to be the most prosperous one. The company also had very strong sales team to carry out sales. However, due to cultural difference and lac of support from the parent companies lead to the downfall of ABB PBS. The managers thus realized that the venture will further decline. The venture also decline due to increasing environmental needs and lack of demand for boilers. Thus the company needs to adopt modern technologies to generate power without emitting any harmful impact on the environment. References Alcacer, J., Delgado, M. (2016). Spatial organization of firms and location choices through the value chain.Management Science,62(11), 3213-3234. Casadess, M. (2016). THE IMPACT OF MANAGEMENT SYSTEMS INTEGRATION THROUGH THE VALUE CHAIN.Center for Quality. Darmawan, M. A., Putra, M. P. I. F., Wiguna, B. (2014). Value chain analysis for green productivity improvement in the natural rubber supply chain: a case study.Journal of Cleaner Production,85, 201-211. de Souza, C. D. R., Mrcio de Almeida, D. A. (2013). Value chain analysis applied to the scrap tire reverse logistics chain: An applied study of co-processing in the cement industry.Resources, Conservation and Recycling,78, 15-25. Gereffi, G., Fernandez-Stark, K. (2016). 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