What is Value Chain in Business?

-The value chain as a tool for identifying ways to create more customer value, according to this model, every firm is a synthesis of activities performed to design, produce, market , deliver, and support its product. The value chain identifies nine strategically relevant activities that create value and cost in a specific business. The primary activities cover the sequence of bringing materials into the business inbound logistics, converting them into final products, shipping out final products outbound logistics, marketing them and servicing them.

Value Chain, Value Chain model, Value Chain guide



Value Chain shows value adding sources for a company



Support activities procurement, technology development, human resource management , and firm infrastructure are handled in certain specialized departments. Several departments, for example, may do procurement and hiring. The firm鈥檚 infrastructure covers the costs of general management, planning, finance, accounting, legal, and government affairs. The firm鈥檚 task is to examine its costs and performance in each value creating activity and to look for ways to improve it. The firm should estimate its competitors鈥?costs and performances as benchmarks against which to compare its own costs and performance. The firm鈥檚 success depends not only on how well each department performs its work, but also on how well the various departmental activities are coordinated to conduct core business processes.





Read More:

http://www.sharemarketsinfo.comValue Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. ...

The value chain, is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller.