Value chain is a way to think about all the steps a business takes to make
a product or service, from getting the materials to selling it. It covers
everything, from getting the materials to selling the finished product.
The main parts of the value chain framework are inbound operations,
operations, outbound logistics, marketing and sales, and service. There are
also four secondary activities: buying and selling, managing human
resources, developing technology, and building the infrastructure of the
company.
A value chain analysis is when a business figures out what its main,
secondary, and smaller tasks are and how well they work. A value chain
analysis can show how the different parts of the chain are linked to each
other and how they depend on each other.
In 1985, Michael Porter, a professor at Harvard Business School, wrote in
his book Competitive Advantage: Creating and Sustaining Superior
Performance about the idea of a value chain.
What does "value chain" mean?
The value chain framework helps businesses figure out what their main and
secondary business functions are and group them together.
By looking at how these value chain activities and subactivities connect to
each other, organizations can see them as a system of functions that work
together. Then, organizations can look at each activity or subactivity on its
own to see if the output can be made better in relation to the cost, time, and
effort it takes.
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Copywriter: Kamran Tagiyev
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