Gb Berhad Value Chain Analysis

Value Chain Analysis is a set of activities that based on the process view of company in specified industry in order to deliver a valuable service or product to the market (Porter, 1985). The Value Chain is conducted by begin with activity of purchasing raw material with suppliers and ending with delivering product to customers via a series of value-added activities, which in order to determine the costs and affects profits. These activities are categorised into 2 parts, Primary and Support activities. The primary activities are Inbound, Operations, Outbound, Marketing & Sales and Service. On the other hands, Support activities are Procurement, Human Resource Management, Technological Development and Infrastructure. Figure 21: Porter 's

On the other hands, creditor payment has dropped to 33 days, this was mainly due to the increased of account payable, which rose 17.87% from its previous year. Hence, based on the efficiency ratio below, GAB Berhad takes 33 days to pay to its suppliers. However, GAB required 72 days to collect the invoice or balance. This indicates the company 's credit policy is not tight and intention to increase the sales and revenue. However, the debtor collection of 72 days has exceeded the industry 's benchmark, which is in between 45 - 60 days. This also indicates that the company may encounter cash flow problems if the figure is persisting in the long run. Therefore, GAB Berhad is advised to review its credit policy and criteria by checking customers ' creditworthiness and the company 's standard payment terms. GAB Berhad also required to identify the customers who are extending their payment duration. If the bulk amount in receivable belongs to a single customer, then action can be taken to the specific customer accordingly. However, if overdue amounts belong to a number of customers, which may indicate that tighten the credit policy for existing and new customers is