![]() ![]() ![]() Primary activities contribute to a product or service's physical creation, sale, maintenance and support. When an organization applies the value chain concept to its own activities, it is called a value chain analysis. Then, organizations can individually analyze each to assess whether the output of each activity or subactivity can be improved - relative to the cost, time and effort they require. The value chain framework helps organizations identify and group their own business functions into primary and secondary activities.Īnalyzing these value chain activities, subactivities and the relationships between them helps organizations understand them as a system of interrelated functions. A diagram of a value chain's five primary activities and four secondary activities. The value chain concept was first described in 1985 by Harvard Business School professor Michael Porter, in his book Competitive Advantage: Creating and Sustaining Superior Performance. A value chain analysis can reveal linkages, dependencies and other patterns in the value chain. The value chain framework is made up of five primary activities - inbound operations, operations, outbound logistics, marketing and sales, service - and four secondary activities - procurement and purchasing, human resource management, technological development and company infrastructure.Ī value chain analysis is when a business identifies its primary and secondary activities and subactivities, and evaluates the efficiency of each point. A value chain is a concept describing the full chain of a business's activities in the creation of a product or service - from the initial reception of materials all the way through its delivery to market, and everything in between. ![]()
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