1. Analyze Firewire using the value chain and competitive forces models.
The Value Chain and Knowledge Management Value Chain
Value chain refers to the various business activities and processes involved in creating a
product, in this context, a surfboard. Value chain analysis is a means of evaluating each of the
activities in Firewire's value chain to help us gain insight into what goes into each of its
activities and to understand where opportunities for improvement lie. By maximizing the value
created at each point in the chain, Firewire can be better positioned to share more value with
customers while capturing a greater share for itself. Similarly, knowing how Firewire creates
value can enable us to develop a greater understanding of its competitive advantage.
Conducting a value chain analysis prompts a consideration of how each step adds or subtracts
value from the final product, in this context, the surfboard.
Knowledge management refers to the set of business processes developed in an organization
to create, store, transfer, and apply knowledge. Knowledge management increases the ability
of the organization to learn from its environment and to incorporate knowledge into its business
processes. In the Knowledge Management Value Chain (KMVC), an organization must
organize and manage the various processes in the KMVC in such a way that the efficiency of
the production factor knowledge will be increased as a consequence.
The knowledge business value chain involves information system activities pertaining to
knowledge acquisition, storage, dissemination and application. In the context of Firewire,
allowing any registered customer to manipulate design from all angles and end up with a
specific design made to surfer specifications before they can place an order sets Firewire apart
from its competitors. Customers are allowed to acquire information already stored in Firewire’s
systems and build up from there. Eventually the specifications of the surfboard that will get
ordered will add to the knowledge base of Firewire and assist in future orders. Firewire thrives
on innovation and is using information systems to acquire a competitive advantage by coming
up with new product ideas that other competitors are not yet aware of.
Besides off-the-rack sizes of surfboards for everyday surfers who are existing customers that
Firewire desires to retain, Firewire is using innovation to appeal to other potential customers,
the elite surfboard market, by making custom surfboards. Their newly organized CAD
(Computer-Aided Drafting) system has enabled Firewire to get ahead of their competitors by
offering their customers to suggest the designs they prefer. This has also made it possible for
Firewire to improve their value chain where the customers can sit in their homes and transmit
a design to the manufacturing plant from the company’s website. The transmitted designs for
the surfboards are fed into the machines that draw them. This way, Fireway is able to offer
product differentiation which results in a competitive advantage.
By providing an intuitive Knowledge management system, Firewire is able to streamline its
customer experience process. All business knowledge is stored in a centralized cloud platform
which then enables customers to self-serve as such information is used for problem solving
without completely depending on support staff as customers design their specific surfboards.
Customers become self-reliant, confident and independent as far as tailoring their surfboards
is concerned. Consequently, their trust in Firewire and by extension the brand will increase as
customers will be confident that Firewire’s knowledge base will have the right solution for all
the bottlenecks they face.
An additional benefit of Firewire’s online design system is the social networking engendered
by the sharing of customers’ unique design files. Before placing an order, customers can show
their modifications to fellow surfers and ask for opinions and advice. After placing an order
and using the product, they can report their experiences and (hopefully) tout their design or
suggest improvements to other customers. Interactive communication such as this drives
customers to the Firewire site, creating a marketing buzz that boosts sales
Competitive Forces Model
Analysing Firewire using the competitive forces model involves examining the number and
power of a company's competitive rivals, potential new market entrants, suppliers, customers,
and substitute products that influence a company's profitability. Firewire is competing in a
crowded field that includes Isle Surfboards, Surftech, Aviso Surf, Board works Surf, Channel
Island, and Lost Enterprises as existing competitors.
Firewire’s customers are gaining bargaining power because they have more access to
information that allows them to compare and contrast the various products provided by
competitors. At any point before, during, and after placing an order, customers are able to share
information with fellow surfers, ask for opinions and advice, report their experiences, and even
tout their design or suggest improvements to other customers. This gives customers more
bargaining power in the market. Ultimately, the decision-making process to place an order for
a surfboard is based on reasons pertaining to each independent customer.
Suppliers are responsible for ensuring the business model and process innovations still adhere
to established rules, regulations, privacy, security, and safety. With Firewire using and thriving
on innovation to compete in the market, they are making it very difficult to have comparable
substitute products in the marketplace thus making their bargaining power high.
The use of innovation enables Firewire to differentiate their product offering resulting in lower
threat of substitutes.
2. What strategies is Firewire using to differentiate its product, reach its customers, and
persuade them to buy its products?
Firewire is;
1. Creating more flexible and maneuverable surfboards that attract top surfers. The
materials and composition of the surfboard mean that Firewire surfboards are far
lighter, stronger, and more flexible than those of their competitors.
2. Reintroducing balsa wood to the board rails in their design for added flex response time
and the ability to maintain speed during difficult maneuvers.
3. Offering a product with lower environmental impact as the materials used to create the
surfboards emit only 2% of the hazardous compounds found in traditional boards, and
recycling excess expanded polystyrene (EPS) foam has earned Firewire international
recognition and awards. This means environmentally conscious individuals and
organizations mostly prefer the Firewire surfboard.
4. Introducing and using ShapeLogic NX software for online customization of the
surfboards, enabling users to easily manipulate board dimensions of established models
within design parameters to achieve customer-specific surfboards.
5. Using the integration of online custom board design software (CBD), CAD, and
computer numerical control (CNC) to manufacture a board that is 97 percent complete,
minimizing the manufacturing time, finishing process, and thus, costs to the consumer.
6. Integrating Computer Aided Design (CAD) with Computer Numerical control (CNC)
in the manufacturing process to enable or allow its customers to experiment with
established designs.
7. Using the social networking community strategy which allows customers to show their
modifications to other surfers and ask for opinions and advice prior to ordering, and
which also allows customers to report their experiences and suggest improvements to
other customers after placing an order and using the product.
8. Driving customers to the Firewire site, by generating marketing buzz thereby increasing
sales. Firewire also uses this tool to retain customers, learn about new trends, get
feedback from experts, determine which model to use, and attract talent.
3. What is the role of CAD in Firewire’s business model?
Before Computer Aided Designs, there were 29 time-consuming and labor-intensive steps in the
surfboard manufacturing process which made it impossible to offer personalized CAD to the average
consumer. Firewire started working with the ShapeLogic NX software in 2009 to develop its
own Firewire Surfboards’ Custom Board Design (CBD) system, which allows users to easily
manipulate board dimensions of established models within design parameters. When the
customer uses the system to order a custom board, CBD generates a precise solid CAD model
of the board that is transmitted directly to the Firewire factory for driving the computer
numerical control (CNC) machines that manufacture the board. This combination of
technologies results in a board that is 97 percent complete, minimizing the manufacturing time,
finishing process, and thus, costs to the consumer. Furthermore, once a surfer has designed the
board of his or her dreams, it can be remade to those exact specifications time and again.
The role of CAD for Firewire is to allow for more efficient designing of surfboards.
CAD enables visualization of new designs in a variety of materials and also enables quick
sharing, collaboration, and consultation. CAD drawings, being digital files, are easy to share
among team members who are working on the same product and sharing is instantaneous. No bulky
drawings need to be transported.
With faster internet becoming an ordinary facility, CAD programs are now being used on the cloud.
Thus, the sketch remains accessible at all times to specified team members for easy review and
modification. CAD-generated models also have standardized formats. This provides uniformity in
design tools and symbols and allows different users to work on the same project without any hurdles.
As a result, Firewall can create premium, affordable surfboards and accelerate production while
making product improvement more flexible. Because designers can work more efficiently,
Firewire will be able to keep their team small resulting in lower production costs, and faster
and smarter work.
With CAD, Firewire is able to reach a larger audience as orders can be made through Firewire’s
website allowing Customers to feel in control of the manufacturing process while in the
comfort of their homes. Customers can report their experiences as well as tout their design or
suggest improvements to other customers. Such interactive communication creates a marketing
buzz that boosts sales for Firewire.
4. How did the integration of online custom board design software (CBD), CAD, and computer
numerical control (CNC) improve Firewire’s operations?
Traditionally, skilled craftsman, called shapers, designed and built surfboards by hand, but
Firewire started doing some of this work using computer aided designs (CAD) sent to cutting
facilities. The company’s computer-aided manufacturing process returned to the shaper a board
that was 85 to 90 percent complete, leaving the artisan to complete the customization and the
lamination process which was about 10 to 15 percent of the work.
The integration of online custom board design software (CBD), CAD, and computer numerical
control (CNC) brought efficiency to the surfboard manufacturing process which comprised 29
time-consuming and labor-intensive steps. This combination of technologies resulted in a board
that is 97 percent complete, minimizing the manufacturing time, finishing process, and thus,
costs to the consumer. This presents a major competitive advantage for Firewire. The current
system allows Firewire customers to experiment with established designs, feed the CAD
process, and integrate it with its computer numerical control (CNC) manufacturing process.
As the CBD system is highly customizable, customers can easily manipulate board dimensions
of established models within design parameters. They can compare the customized board to
the standard board to fully understand the design before placing an order. When the customer
uses the system to order a custom board, CBD generates a precise solid CAD model of the
board that is transmitted directly to the Firewire factory for driving the CNC machines that
manufacture the board.