Risk Management

Question 1 (10 marks)

Read the scenario below and answer the question that follows.

Creative Furniture is a manufacturer of high-quality furniture that is highly respected for its craftmanship and timeless designs. The company prides itself in top quality products, so it maintains a close relationship with its suppliers and is able to return items that do not satisfy minimum quality requirements.

Creative Furniture has a dedicated showroom where customers can view the furniture that they have on offer, and trained consultants assist clients with any questions that they may have. The company has its own dedicated delivery vehicles to ensure that furniture is safely transported and delivered to customers. Furthermore, the company has a repair service, for minor repairs to be done at customers houses.

Carpenters use precision tools to cut individual components from large blocks of wood. The company receives all orders of source materials at its warehouse that is located on the same premises as its manufacturing plant. Completed furniture is carefully inspected for any defects, before two layers of varnish are applied. The company has a small storage facility, where completed furniture is kept before being sent to customers.

Creative Furniture has a dedicated social media page, where they post photos of their latest designs and special offers. To ensure customers enjoy many years of service, Creative Furniture offers a refurbishment service, whereby clients can return damaged furniture. Broken parts are replaced, and all paintwork is restored.

1.1 Review Porters Value-Chain Analysis Model, and explain how Creative Furniture implemented the five primary activities in order to conduct its business efficiently along the value chain.