Indigo Sdn. Bhd. (ISB) was founded in 1990. The company has more than 20 years of experience in the office furniture industry. ISB is one of the market leaders in the Malaysian furniture industry and has successfully transformed its presence as one of the renowned global brands that focused on the Middle East, Asia, Australia, and New Zealand markets. ISB specializes in designing and manufacturing a wide range of workspace solutions, workstations, and a variety of the best quality office furniture and many more. ISB is a well-known brand because of its contemporary and functional designs and top-quality products. All its products are rubberwood-based. The company uses a slogan such as "Why pay more when you can pay less" in its advertising campaign. 

The guiding philosophy of ISB is to always provide the customers, with the best in value, savings, and price. ISB gets supplies of raw materials from local suppliers. The company has a long-term partnership with rubberwood suppliers to have good credit terms for its raw materials. The production of furniture in ISB involves a few stages, which are design, machinery, assembly, painting, and quality inspection. The finished goods will be placed in the warehouses before being shipped to the local and international customers using the appropriate transportation channel. 

The Marketing department is responsible for an advertising campaign and promoting the products to the potential customers. ISB also has Customer Service department to entertain any inquiries from customers. ISB is proud of its Research and Development department which focuses on design and production and successfully come out with the idea for cost reduction and innovative product design. With its strong financial access, ISB invested in the latest technology of manufacturing to continuously control the production costs. However, in recent years, the profit of ISB is decreasing from year to year. The Managing Director is considering ISB's future business strategy. He asked the Management Accountant to do the appropriate analysis.

 

REQUIRED: 

(a) Explain FIVE (5) primary activities of ISB's value chain. (5 Marks)

 

(b) Identify the current business strategy adopted by ISB. (1 Mark)

(c) Determine TWO (2) ways how ISB can exploit its value chain to achieve its current business strategy.