Value Chain Analysis of E-commerce

E-commerce (electronic commerce) is the method of procuring products, goods, and services online over the Internet. Technological development in the semiconductor industry played a key role in making e-commerce the largest growing area. Today, we’ll discuss the value chain analysis of E-commerce supply chain analysis; primary and supporting activities in the process of value chain analysis Example Company. They are inbound and outbound logistics, operations, marketing, and customer service; infrastructure, HRM, technology, and procurement as an application of the value chain analysis process.

Tech Building Elements of the E-commerce Industry

• Automated data collection system
• Inventory management system
• Electronic data interchange system
• Online transaction processing
• Internet Marketing
• Supply chain management system and processes
• Online payment transfer
• Mobile commerce

Type of E-commerce Methods and Transaction

• B2B (business to business)
• B2C (business to customers)
• C2C (customers to customers)

The Value chain analysis of E-commerce supply chain analysis would analyze the primary and supporting activities in the process of value chain analysis. They’re inbound and outbound logistics, operations, marketing, and services; infrastructure, HRM, technology, and procurement. Here’s the supply chain analysis of E-commerce value chain analysis company example as follows;

Value Chain Analysis of E-commerce

Let’s discuss the primary and supporting activities involved in the process of value chain analysis of E-commerce supply chain analysis. It is an application of value chain analysis based on Porter’s model; some of the key elements and components of value chain analysis are as follows;

Primary Activities of E-commerce

The primary activities are directly involved in the production of products and goods and adding value to the online store and e-commerce Company. Some of the five main primary activities in the value chain analysis of E-commerce supply chain analysis are as follows;

Inbound Logistics of E-commerce

I-Raw Material Sourcing

In the case of manual work, E-commerce platforms need to source required raw materials, supplies, and components for the production of products and goods. They should find reliable suppliers of raw materials and sign a contract with them. Make sure to discuss all the small details like; required supplies, transportation of raw supplies, and frequency of delivering raw materials and supplies.

II-Supply Chain Planning

In order to efficiently manage all the supply chain processes like supplier selection, ethical and sustainable practices, and storage of raw material; you should develop a proper system. It is necessary to integrate all the processes, tracking systems, raw inventory storage, and distribution channels; it allows you to decrease the cost.

Outbound Logistics of E-commerce

I-Distribution and Transportation Channels

E-commerce platforms partner up with various transportation and 3rd party logistics companies for the distribution of their products and goods. Depending on the type of contract with multiple online stores, logistics service providers transport raw materials to the production and manufacturing factories, warehouses, and distribution centers, and then to the end consumers. They employ GPR technology satellite positioning, and other sensors to provide the tracking service to the E-commerce platforms and the consumer.

Operations of E-commerce

I-Production & Manufacturing

Some E-commerce platforms perform all the production and manufacturing operations to ensure quality and consistency; others outsource all the production works to third-party manufacturers. Either way, the production factories receive raw supplies and materials from the verified suppliers of the online store. After completing the production work, they deliver the finished goods to the warehouses and distribution centers of the E-commerce platform.

II-Warehousing

Some E-commerce companies manage their own warehouses and distribution centers; others outsource the entire warehouse operations to any 3rd party. They receive finished goods from the manufacturers, temporarily store them, package and label them, process all the customers’ orders, and verify their payment methods. After verifying the payments of customer’s orders, they ship the particular products and goods to the end consumers.

Marketing & Sales of E-commerce

I-Digital Marketing

E-commerce platforms run various types of marketing and advertisement campaigns to approach the targeted customer market. They employ various social and digital marketing channels; and launch promotional and discounting offers to attract the attention of customers. However, the right promotional campaign, the right offer, and precise targeting of the customer market would help the company to increase the conversion rate.

Services of E-commerce

E-commerce platforms and online store companies offer various types of products and services to customers. The additional services and offers would help the company to increase the customer satisfaction level and promote brand loyalty. Some of the main services of the e-commerce platforms are as follows;

• Home delivery service
• Order and package tracking
• Online payment service
• Package return service

Supporting Activities of E-commerce

Supporting activities are indirectly involved in the production of products and goods and adding value to the online store and e-commerce platform. Some of the main supporting activities in the value chain analysis of E-commerce supply chain analysis are as follows;

Infrastructure of E-commerce

E-commerce companies have established a very large infrastructure of production and manufacturing facilities; supplier networks, delivery service providers, warehouses, distribution centers, and order fulfillment operations. The large and well-developed infrastructure of e-commerce platforms would help the company to timely deliver the finished goods to the end consumers.

HRM of E-commerce

The human resources management department of E-commerce companies plays a key role in building a large supplier network; integrating all the processes, the right allocation of the workers and employees in different areas; recruiting and selecting the right employees, and then delivering the finished goods to the end consumers.

Technological Development of E-commerce

E-commerce companies need to employ the latest and advanced technology to smoothly perform various operations. It could be in the form of advanced tracking systems, automated chatbots, order processing systems, online payment methods, warehouse and inventory management systems, and robots. Advanced technological tools and equipment allow the company to efficiently perform various operations and processes.

Procurement of E-commerce

E-commerce platforms and companies are highly careful about ethical sourcing and procurement of raw materials and finished goods from suppliers and manufacturers. In order to maintain their sustainable brand image, they have set up strict regulations for suppliers and manufacturers to ensure their compliance with human rights standards and requirements.

Conclusion: E-commerce Value Chain Analysis Example Company | Application of Value Chain Analysis Process 

After an in-depth study of the value chain analysis of E-commerce; we have realized that E-commerce is the world’s largest online retail market. If you are learning about the E-commerce value chain analysis example company; then you should keep in mind the abovementioned primary and supporting activities. They’re inbound and outbound logistics; operations, marketing and sales, and services; infrastructure, procurement, HRM, and technological development as an application of the value chain analysis process.