Introduction to Porter Value Chain
Watch the video where I show you how to control a WowWee Rovio mobile spy robot over the Web using a Nintendo Wii Remote control. The Nintendo Wii Remote talks to the PC running Robodance, and the PC tells Rovio which command to press based on what WiiMote button is pressed. Join hundreds of millions of players for FREE and start the fun slingshot adventure now! Team up with your friends, climb the leaderboards, gather in clans, collect hats, take on challenges, and play fun events in all-new game modes. Evolve your team and show your skills in the most exciting Angry Birds game out there! Get to know all of the iconic characters and experience the fun gameplay.
EMBA Pro Porter Value Chain Solution for Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo case study
Famous for the hit game 'Angry Birds', game developer and entertainment company Rovio is an example of outstanding entrepreneurship. This case analyses the factors that made its base in Espoo, Finland, an attractive place and contributed to the start-up's overall success as it became a world leader in mobile gaming.
Case Authors : Sami Mahroum, Elizabeth Scott
Topic : Innovation & Entrepreneurship
Related Areas : Entrepreneurship, Ethics, Influence, Technology
EMBA Pro Porter Value Chain Analysis Approach for Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
At EMBA PRO, we provide corporate level professional Marketing Mix and Marketing Strategy solutions. Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo case study is a Harvard Business School (HBR) case study written by Sami Mahroum, Elizabeth Scott. The Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo (referred as “Rovio Espoo” from here on) case study provides evaluation & decision scenario in field of Innovation & Entrepreneurship. It also touches upon business topics such as - Marketing Mix, Product, Price, Place, Promotion, 4P, Entrepreneurship, Ethics, Influence, Technology.
Our immersive learning methodology from – case study discussions to simulations tools help MBA and EMBA professionals to - gain new insight, deepen their knowledge of the Innovation & Entrepreneurship field, competitive advantage, steps to value chain analysis,industry analysis,primary activities, support activities, inbound outbound logitics,marketing & services, and more.
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Porter Value Chain Framework
Value Chain is developed by management guru Michael E. Porter and it was a major breakthrough in business world for analyzing a firm’s relative cost and value. Value Chain was first introduced in 1985 in Harvard Business Review article and Porter’s book “Competitive Advantage”. Value Chain is also known as “Porter’s Value Chain Framework” and it is extensively used to analyze relevant activities of a firm to shed light on the sources of competitive advantage. According to Michael Porter – Competitive Advantage is a relative term and has to be understood in the context of rivalry within an industry.
Porter Five Forces & Porter Value Chain
Porter started with the quintessential question – “Why are some companies more profitable than others?” He answered the question in two parts – How companies benefit or limited by the structure of their industry, and second a firm’s relative position within that industry.
To conduct industry structure analysis Porter developed Five Forces Model, and to understand the sources of competitive advantage of the firm in relation to competitors in that industry Porter developed Value Chain Analysis Method.
The strengths of the Porter’s Value Chain Analysis are - how it disaggregates various activities within the firm and how it put value to value creating activities in an industry wide context.
|Industry Structure||Relative Position|
|Porter's Framework||Five Forces||Value Chain|
|The Analysis focuses on||Drivers of Industry Profitability||Differences in activities|
|The Analysis explains||Industry average price and cost||Relative Price and Cost|
What is Competitive Advantage?
According to Michael Porter – “If a strategy is to have real meaning then it should reflect directly into a company’s financial performance”. If Rovio Espoo have a real competitive advantage, it means that compared to its rivals Rovio Espoo is - operating at lower costs, commanding a premium price, or doing both. Competitive advantage is about superior performance and it is a relative term. When all rivals in the Rovio Espoo’s industry try to compete on the same dimension, no one firm gains a competitive advantage.
Key Steps in Porter's Value Chain Analysis
Step 1 - Start by laying out the industry value chain
How far upstream or downstream do the industry’s activities extend?
Compare the value chains of rivals in an industry to understand differences in prices and costs
What are the key value-creating activities at each step in the chain?
Step 2 - Compare firm in Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo case study value chain to the industry’s value chain
Present vs Alternative Value Chain - You should design an alternative value chain and map out areas where improvements can be made. Comparing two or more alternative value chains can provide a good insight into bottlenecks within the industry.
Step 3 - Zero in on price drivers, those activities that have a high current or potential impact on differentiation
Align price drivers in the value chain. Often price drivers are customer expectations that customers are willing to pay more for. For example customers are willing to pay more for flawless uniform experience in Apple products even though Apple products are not the cutting edge products.
Step 4 - Zero in on cost drivers, paying special attention to activities that represent a large or growing percentage of costs
If the strategy dictates cutting cost to be profitable then Rovio Espoo should focus on areas that are not adding value to customers' expectations, and costs that are there because of operational inefficiencies.
Value Chain Analysis of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo Case Study
Value Chain and Value System
Rovio Espoo value chain is part of a larger value system of the industry that includes companies either upstream (suppliers) or downstream (distribution channels), or both. Manager at Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo needs to see each activity as part of that value system and how adding each activity or reducing each activity impact the Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo value chain. The decision is regarding where to sit in the value system.
Value Chain Activities – Primary Activities & Support Activities
As per the Value Chain model there are broadly two generic categories of activities – Primary Activities and Supporting Activities.
What are Primary Activities in Porter’s Value Chain?
As illustrated in the Value Chain diagram, Rovio Espoo has five generic categories of primary activities –
These activities of Rovio Espoo are associated with receiving, storing and disseminating the inputs of the products. It can include material handling, warehousing of physical products, as well as architecture to receive and store customer information for digital media company. Rovio Espoo at present has outsourced most of its inbound logistics activities.
Activities that help the organization to transform raw material into finished products. For the purpose of this article the definition is broad – it can mean moulding plastic to make products, using customer data to serve advertisements based on usage behavior to clients etc.
Rovio Espoo under takes these activities to distribute the finished products to channel partners and final buyers. Outbound logistics activities include – processing, warehousing, scheduling, distribution network, and wholesalers and retailers order fulfillment.
Marketing and Sales
These activities are undertaken by Rovio Espoo to create means through which the buyer can buy a firm’s products. These activities include – advertising and promotion, pricing, sales force management, channel selection, marketing etc.
Rovio Espoo needs to provide after sales services and maintenance for successful usage of the product. Service activities of Rovio Espoo can include – post sales maintenance, installation services, part supply, product forward and backend alignment of software, and training.
What are Support Activities in Rovio Espoo Value Chain?
As the name explains, Support Activities of Rovio Espoo are the one that supports the firm’s Primary Activities. Porter divided the Support Activities into four broad categories and each category of support activities is divisible into a number of distinct value activities that are specific to the industry in which Rovio Espoo operates. The four generic support activities are –
Firm infrastructure support activities at Rovio Espoo consists activities such as – quality management, planning, general management, finance and accounting and legal services.
Firm infrastructure activities at Rovio Espoo supports entire value chain though the scope varies given that Rovio Espoo is a diversified company even within the industry. For example the finance and planning at Rovio Espoo are managed at corporate level while quality management, accounting and legal issues are managed at business unit level.
Human Resources Management
In an environment where each organization is striving to become a learning organization, Human Resources Management is key to the success of any organization. HRM support activities include – Recruiting, Hiring, Selection, Training & Development, People Planning, Skill Assessment and Compensation at both business unit level and corporate level.
Human resource management affects competitive advantage in any firm, but in some industries it is defining factor. For example in the consulting companies HR is the main source of competitive advantage.
Technology supports almost all activities in modern day organization. In the technology industry, technology development has become a source of competitive advantage. Technology development at Rovio Espoo may include activities such as - technology selection, feature design, component design, process engineering, and field-testing.
Procurement Activities at Rovio Espoo
Procurement activities at Rovio Espoo include activities that are undertaken to purchase inputs that are used by Rovio Espoo’s value chain. It doesn’t include purchase inputs themselves. Purchased inputs may include - raw materials, supplies, machinery, laboratory equipment, office equipment, and buildings.
Like all other value chain activities procurement also employs technology for things such as – procedures, vendor management, information system, and supply chain partner qualification rules and ongoing performance evaluation.
Metrics and KPIs to Avoid while Analyzing Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo Value Chain
Growth in sales is not a good goal for value chain analysis as every managers know that boosting sales is easy to do by reducing the prices dramatically.
Growth or market share is also not a very reliable goal as often firms end up pursuing market share at the cost of profitability.
Shareholder value, measured by stock price, is not a good barometer to analyze value chain. It is preferred by top management but it is only useful in long run rather than competitive strategy in short to medium terms.
5C Marketing Analysis of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
4P Marketing Analysis of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
Porter Five Forces Analysis and Solution of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
Porter Value Chain Analysis and Solution of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
Case Memo & Recommendation Memo of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
Blue Ocean Analysis and Solution of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
Marketing Strategy and Analysis Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
VRIO /VRIN Analysis & Solution of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
PESTEL / STEP / PEST Analysis of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
Case Study Solution of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
SWOT Analysis and Solution of Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo
References & Further Readings
M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
Sami Mahroum, Elizabeth Scott (2018), 'Rovio Entertainment: A Case Study of How Rovio Derived 'Place Surplus' in the Finnish City of Espoo Harvard Business Review Case Study. Published by HBR Publications.
O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975)
Kotler & Armstrong (2017) 'Principles of Marketing Management Management', Published by Pearson Publications.
WowWee Rovio Video Script
Below is the text of the video script. Note, the Robodance Rovio WiiMote interface does have the Nudge Mode talked about below. But that part of the video, and the part where I show Rovio’s web interface responding to the WiiMote button presses, was cut out because it was too lengthy.:
WowWee Rovio Controlled by Nintendo Wii Remote (WiiMote) - First Rovio Hack/Mod Ever
(Big notice that WiiMote control is not a stock feature of Rovio)
This is Rovio, WowWee's sleek new space age home and office surveillance robot.
This is the Nintendo Wii Remote control, also known as the WiiMote, and is the revolutionary gaming console remote that has changed the world.
What could be cooler than the hottest robot of the year or the hottest remote control of the year? The two of them together. In this video I will show you how to use the WiiMote, with the help of a Bluetooth capable PC and a free software program called Robodance, to control my Rovio spy robot from anywhere in the world I have a web connection. Note, you do not need a Nintendo Wii game console, just the WiiMote.
This is WowWee's web browser based interface for the Rovio. The interface also runs on many smart phones, laptops, and tablet PC's too, with varying differences in appearance, but this is how the Web Interface looks on a desktop PC. This area is the robot navigation pad. These four arrows move it forward backward, sideways to the left and sideways to the right and these two arrows turn the Rovio left and right. Clicking the Headlight icon turns Rovio's headlight on and off. Clicking the Camera icon takes a snapshot of Rovio's current view and sends it to your E-mail account. Clicking on the Home icon sends Rovio to his charging dock for recharging which I'll show you later. There are a lot more features to the interface which I'll show you in another video,s ince WowWee did such a terrific job with it, but now it's time for the good stuff.
This is the Nintendo Wii Remote. I have mapped the buttons to the Rovio's different movements like this. The four points of the directional pad are mapped to Rovio's forward, backward, sideways left, and sideways right. The Plus button turns Rovio left and the Minus button turns him right. The Home button sends Rovio back to his charging dock. The 1 button takes a picture and the 2 button toggles Rovio's headlight on and off.
This time I'll put the camera on the interface as I press the WiiMote buttons. Notice how they change appearance as if the mouse was clicking them instead of the WiiMote. This provides valuable visual feedback that lets you know everything is working properly.
Here's another very powerful feature I added to the WiiMote interface. I'm using the A button on the WiiMote as a SHIFT button which changes the Rovio actions triggered by the WiiMote button presses, just like the SHIFT button on your keyboard. Pressing the A button puts you in what I call NUDGE mode.
(Title: NUDGE MODE)
When you are trying to line up a person's face or perhaps an object with Rovio's camera remotely, the ability to make small reliable precise movements is critical. In the NUDGE MODE, almost all the buttons execute the same movement as in NORMAL MODE, except that the movements are a lot smaller. This makes lining up the camera much easier. Note, you can always tell which mode you are in by looking at the Blue LED lights. If they are blinking all together like this you are in NORMAL MODE:
(Show normal mode LEDs)
Drivers Roxio Video Capture Usb
If the are blinking 2 at a time then you are in SHIFTED MODE:
(Show shifted mode LEDs)
The only difference in the button assignments is with the Home, 1, and 2 buttons. In NUDGE MODE, they each put Rovio's camera in one of it's three different positions:
(Show camera positions).
Finally, if you don't like how the buttons are assigned you can change them to any Rovio operation you like using the WiiMote Map editor included with the program. You can even assign one of the patrol routes you created for Rovio or a script that you made yourself that contains different Rovio operations. Check our web site for a lot more information on Rovio and Robodance.
Before I go I want to point out why I love Rovio so much. Rovio is not a glorified remote control car like so many other robots are. Rovio is smart. Damn smart. Rovio can drive itself thanks to its Northstar navigation system. Before I go I just wanted to show you this autonomous sci-fi intelligence in action.
Watch Rovio as I tell it to go home and recharge. It's lifting its camera to the ceiling because it is looking for two invisible infrared beams that it uses to guide itself, just like the sailors of old did when they used the North Star in the night sky to find their way home. See the small adjustments it is making to align itself with the charging dock? And now, one final push to lock itself into place. Success! That intelligent driving is what make Rovio, well awesome, but on a practical note, ensures Rovio's usefulness in those places you don't have a good web connection. Driving a remote vehicle under those circumstances can be impossible. But you don't care. Rovio can drive itself!
Conclusion with title screens
Now you can control your Rovio robot from nearly anywhere in the world you have a web connection and a suitable web browser with your Nintendo Wii Remote control using Robodance, the free software program for advanced robot control. Please visit our web site RobotsRule.com for important security tips regarding Rovio and other cool tips and tricks. Visit Robodance.com to find out more about Robodance and sign up for our valuable newsletter while you're there. Thanks for watching.