VALUE CHAIN ANALYSIS

THE VALUE CHAIN

The value chain identifies where the value is added in an organization and
links the process with the main functional parts of the organization. Value
chain represents the internal activities a firm engages in when
transforming inputs into outputs. A value chain is used to describe all the
business activities it takes to create a product from start to finish (e.g.,
design, production, distribution, etc.). It is used for developing competitive
advantage because such chains tend to be unique to an organization.
 VALUE CHAIN ANALYSIS

Value chain analysis (VCA) is a process where a firm identifies its

primary and support activities that add value to its final product
and then analyze these activities to reduce costs or increase
differentiation. Value chain analysis is a way for businesses to
analyze the activities they perform to create a product.
THE VALUE CHAIN
 THE VALUE CHAIN

Primary Activities
• Inbound logistics
• Operations
• Outbound logistics
• Marketing and sales
• Service
 THE VALUE CHAIN

Secondary Activities
• Firm infrastructure
• Human resource management
• Technology development
• Procurement