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AAMI and Hyundai Regarding Customer Benefit Package And Value Chain Design

Task:

Executive Summary:

Operations management is a skill which maily focus on the design and manufacturing of products and services. operations manager in an organization manage daily production process. In toyota motor company operations management follow ten strategies decisions to increase the efficiency and profile of the comapny. AAMI's operations management manage all functions in the company. A budle of goods and services which is valuable for the customers is called customer benefits package. Value chain is consist from all major functions that occurs in an organization. Designing and planning, raw materials, technologu and sales are included in the value chain. operations strategies are the methods which is followed by the organizartion to achieve goal. this report provide information about copmare and contrast between two companies on the basis of customer benefits package. first company is typta motor company which is a product oriented company. Toyota is Japanese's private limited company which makes automobiles. toyota is most popular company and has branches in all over the word. second company is AAMI which is an Australian company and provides the insurance services to the customers. In beginning AAMI provides only helth and life insurance to the customers but now days AAMI offers property and transport insurance facilities to the customer.

Introduction

  • Operations Management
  • Importance of OM in Industry chosen
  • CBP
  • Value Chain
  • Operations Strategy
  • Product related Company
  • Service related Company

Findings

  • Product Company Business Strategy
  • Product Company Operational Strategy
  • Service Company Business Strategy
  • Service Company Operational Strategy
  • CBP of a Product
  • CBP of a Service

Analysis

  • Compare and Contrast CBP of a Product & Service ( Similarities and Differences) 
  • Value Chain of Product Company, advantages and disadvantages
  • Vale Chain of Service Company, advantages and dis advantages
  • Product Company Competitive Priorities
  • Service Company Competitive Priorities

Recommendations/Conclusion 

  • Recommendations: Suggestions given to Product and Service companies (CBP, Value Chain Competitive Priorities)
  • Conclusion: Summary

Answer

EXECUTIVE SUMMARY 

The main aim of the companies doing any kind of business is to make maximum amount of profit and have a competitive advantage over its competitors. The scenario is same for Hyundai and AAMI. The case study highlights the customer benefit package of these two companies and tries to compare and contrast the customer benefit package of each firm. Similarly, the second part of the report has been used to compare and contrast the value chain design of AAMI and Hyundai. 

From the analysis, it has been found out that Hyundai is focused in providing goods (cars, vans, etc.) to its customers whereas, AAMI is concerned in giving quality service to its clients as a result, the customer benefit package of both the firms is different in nature. In the same way, the value chain design is different as well because of the different approach to their work. But having said so, both the companies are very successful in their respective field and making a good amount of profit and they have a competitive advantage against its competitors. 

However, it is very important to do the primary activities along with the additional supportive activities in a proper way which will eventually result in giving maximum amount of profit to the company. In addition, continuous research and development should be done to be the best in the business as there is a huge amount of competition in the market.  


Case Study of AAMI and Hyundai 

1.0 INTRODUCTION

The main aim of this report is to complete a case study analysis describing, comparing and contrasting a primary Customer Benefits Package of two companies under the same industry. The two companies chosen for this case study are AAMI and Hyundai, one of the companies’ i.e. Hyundai is based around a purely physical product and the other company which is AAMI is based upon service. Furthermore, Value Chain Design and Structure will be discussed based on contrasting and comparing Hyundai and AAMI. 


2.0 CUSTOMER BENEFIT PACKAGE

Customer Benefit Package (CBP) is the value or benefit which is perceived by the customers through use of set of goods and services (Hill and Hill 2012). In fact, CBP is the way to position goods and services by using a broad vision about how goods and services are brought together (Schroeder 2007).

So, to be successful in this competitive world, every organisation tries its best to provide the best CBP to the customers as a result it can have the competitive advantage against its competitors. Therefore, every company must offer primary goods or services along with peripheral goods and services so the customers are attracted and loyal to the company (Aviv et al. 2009). 


2.1 Hyundai

Hyundai has a long history and it is one of the successful companies in the automotive industry. There are many companies in this industry but the CBP of Hyundai makes it best from its competitors. Great design and innovation along with the safety features makes it different from other companies. The first thing that the company do is differentiate its potential customers to different sections like low income group, economical class and high class (Jo & You 2011).

The Customer Benefit Package of Hyundai is shown below:


   Figure I – CBP of Hyundai (Hyundai 2016)

Here, the primary good is vehicle with cutting edge technology and the remaining facilities are peripheral goods. Besides these, there are other additional benefits to the customers such as free coffee and tea, replacement parts, online booking facility; web based scheduling of oil change and other service requirements. Therefore, as a whole it can be considered as a complete package of benefit to the customers of Hyundai (Voss et al. 2002) 

2.2 AAMI

Australian Associated Motor Insurers Limited (AAMI) is providing car, home, business, etc. insurance to its customers since 1989. However, this report is focusing only in car insurance so the insurance service provided within the automotive industry will be highlighted. Hyundai is one of the major partners of this company as the insurance is required by all the vehicles in Australia (AAMI 2016).

The best part about AAMI is, it is providing quality service in cheap price to its customers so it is making a good brand value in the market. The CBP of AAMI is given below:

                             Figure II – CBP of AAMI (AAMI 2016)

So, from the above figure, it can be concluded that it is one of the best benefit packages to the customers and as a result it has the competitive advantage against its competitors (Miller 2006). 


2.3 Comparison and Contrast between CBP of Hyundai and AAMI

Although both these companies are under the same industry, their nature of work and services or products, offered to the customers are different. The above mentioned customer benefit package of these two companies differs hugely. Hyundai is primarily focused in products and the core competency of the company is making cars with highest quality inbuilt with latest innovation and technology along with competitive price so that it can have a competitive advantage against its competitors (Mundy 2013). 

However, AAMI is focused in providing services to the customers and make them happy and satisfied.  AAMI has highly trained staffs who help to solve any kind of problems or issues regarding maintenance or repairs, accidents, etc. in the earliest possible time. Some delay in providing the service can cause a huge damage in the business as word of mouth is very important in any kind of business in Australia. Therefore, their approach to the customers varies as they are targeting for different purposes (Sturgeon et al. 2008). 


3.0 VALUE CHAIN DESIGN 

Value Chain is the process of delivering the product and services to the customers. It includes various functions in an organisation such as purchasing, marketing and sales, human resources management, information systems and technology, finance and accounting, distribution, operations, service and support (Russell and Taylor 2011).

3.1 Hyundai – Value Chain

The value chain is very important to be successful in any market and in this competitive world; it is inevitable to have the best value chain. The following figure shows the value chain for Hyundai


Primary Activities 

Inbound   Logistics

Operations

Outbound   Logistics

Marketing   and Sales 

Service

Profit   Margin 
Materials Handling  
Assembly of Parts  
Order Processing  
4P’s of Marketing
Product
Price
Promotion
Place

Customer Service

Fig III – Value Chain of Hyundai (Hyundai 2016)

From the above figure, it is clear that, Hyundai has a good infrastructure along with qualified, highly skilled and experienced manpower. Similarly, the company is using the latest innovation and technology to produce their products and they are purchasing raw materials of high quality as a result, the finished product is of premium quality. All these are support activities of the value design which eventually helps in making a big amount of profit to the company (Harrison 2001). 

In the same way, the primary activities of the company are inbound logistics where the handling of materials is done. Similarly, manufacturing and assembly of the products comes under operations and there are outbound logistics, marketing and sales and service as well. So, as a whole, it is very important to have all the activities performed in the good way so that the margin of profit is high and in the meantime, customers are satisfied (Russell and Taylor 2011).     

3.2 AAMI – Value Chain

The value chain of the company is according to their purpose of the business. Here, the main aim of the business of AAMI is to provide the quality service to the customers and make them satisfied from every aspect. Therefore, the value chain is designed accordingly which is shown in the table below:


Primary Activities 

Service Development
Marketing & Sales
Policy Administration
Claims/Benefits Managements
Asset Management
Underwriting
New Service
Delivery   Channels
Research
Promotion
Target   Markets
New Customer
Cross   selling
Transaction   processing
Payments
Claims   submissions
Claims   settlement
Payments
Risk   Analytics
Portfolio   Management

Support Activities

Data   Analytics
 
AAMI   Infrastructure (Finance, IT, etc.)
 
Reinsurance
Profit Margin 
Human   Resources Management
 


Fig IV – Value Chain of AAMI

According to the above table primary activities of the insurance company AAMI are service development, marketing and sales, policy administration; claims benefit management and asset management. If all the activities are done effectively and efficiently, then the margin of profit will be high. Similarly, support activities such as data analytics, infrastructure of the company, reinsurance and human resource should be good to provide good service to the customers and make profit because the main aim of any company is to make profit as much as possible (Miller 2006). 

3.3 Comparing and Contrasting Value Chain

Looking at the value chain of both the companies, it is clear that the approach to their business is hugely different as Hyundai is focused in providing goods or products to the customers and AAMI is mainly concerned in providing better service to its customers. 

However, the main aim of these both companies is to make their customers happy and have the competitive advantage over their competitors. In the same way, another similarity of these companies is to make maximum amount of profit. But, having said so, their way of doing business is different because of the difference in the value chain design. Some of the department of both companies are similar but the approach of doing the work differs. As a service provider, AAMI needs to be very careful as it has to be readily available for 24/7 but in this case, Hyundai has some flexibility as it does not have to provide the goods to the customers for whole 24 hours (Voss et al. 2002). 

4.0 Findings 

From the above analysis, it has been found that both the companies are doing a great work in their respective area and although these companies are under the same industry but their approach is different towards the customers. The reason behind this fact is Hyundai is focused in providing goods or products to its customers whereas; AAMI is primarily concerned in giving quality service to its customers.  

5.0 Conclusion

The case study highlights the customer benefit package of two companies, where one is based upon goods and next one in service within the same industry. Although there is a huge difference in the customer benefit package, both are successful in their respective market. In addition, the value chian design of these companies were highlighted and analysed and it is found that although the design varies because of the different nature of the work but due to their good operations strategy, they are doing a fantastic job and making a good amount of profit and moreover, having a competitive advantage over its competitors.  

  1. Recommendations

From the above study and analysis, the following points should be considered:

  • In the value chain design, when operating the support activities, the company should be very careful as there must a good balance between these activities which helps in making a good amount of profit.
  • Similarly, the company must look the ways to cut the cost in primary activities as simple margin leads to a huge amount of profit or loss to the company.  
  • Hyundai should focus in research and development as there is a very high competition in the automobile industry and it must be aware with the latest innovation and technology. 
  • AAMI should always keep an eye to provide quality service to its customers in the least possible time and make the customers happy as word of mouth plays a great role in the business. 
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