![]() ![]() For this reason, conducting a Value Chain Analysis is a great way of identifying which aspects of your process are actually generating value. Instead of analyzing the costs of entire departments, Porter’s model instead focuses on individual activities and seeing how they are connected. So, what goes into conducting a Value Chain Analysis and how can you make this process as simple as possible? What is a Value Chain Analysis?Ī Value Chain Analysis might seem complex at first glance, but it is fairly straightforward when you know what steps are involved in actually conducting one. With a value chain being comprised of the activities a business undertakes to deliver a product to its customers and demonstrating how these activities are connected, a Value Chain Analysis will help you understand the value each of them brings to the process. Porter, in his 1985 book, Competitive Advantage, in which he also introduced the idea of the ‘value chain’. This concept was originally discussed by the Harvard University Professor, Michael E. For this reason, a Value Chain Analysis can help your business to create a more competitive strategy going forward. ![]() It requires you to examine your organization’s external activities when creating, marketing and distributing a product or service offering, so you can recognize which activities are bringing the most value and which can be improved upon. Conducting a Value Chain Analysis will help you examine whether your business’s outputs generate a greater value than the costs of creating them, so you can ensure that you are producing the best possible profit margin.Ī Value Chain Analysis is one of the most important strategy tools for businesses to determine whether they are actually profitable and help them stand out from their biggest competitors. However, it’s vital to ensure that this value isn’t coming at a great cost to your business. Creating value for their customers is something that every business strives to achieve as it can help you to gain a competitive advantage over others in your market. FebruThe simple way to conduct a Value Chain Analysisīy Louise Cunnah posted in Ayoa, Quick Tips. ![]()
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