Value chain analysis
Introduction
The business value chain, also called value chain, is a theoretical model that allows describing the development of the activities of a business organization generating value to the final product, described and popularized by Michael Porter in his work, Competitive Advantage: Creating and Sustaining Superior Performance (1985).[1].
Support activities
Primary activities are supported or assisted by those also called secondary activities: and Michael Porter was the first to talk about these concepts.
Value chain.
The value chain quickly came to the forefront of business management thinking as a powerful analytical tool for strategic planning. Your ultimate goal is to maximize value creation while minimizing costs. What it is about is creating value for the customer, which translates into a margin between what they agree to pay and the costs incurred by acquiring the offer. However, practice has shown that the reduction of monetary costs also has a technological limit, as it has sometimes also affected the quality of the offer and the value it generates. For this reason, systemic thinking in this aspect has evolved to develop value propositions, in which the offer is comprehensively designed to optimally meet demand...[3].
The value chain helps determine the activities, core business or distinctive competencies that allow generating a competitive advantage. Having a market advantage is having a relative profitability higher than rivals in the industrial sector in which you compete, which has to be sustainable over time.[3]
Profitability means a margin between revenue and costs. Each activity carried out by the company must generate the greatest possible income. If not, it should cost as little as possible, in order to obtain a higher margin than rivals.
The activities of the value chain are multiple and also complementary (related). The set of valuable activities that a business unit decides to carry out is what is called competitive strategy or business strategy, different from corporate strategies or the strategies of a functional area. The concept of subcontracting, outsourcing or externalization also results from the analysis of the value chain.[1].
The concept has been extended beyond individual organizations. It can also be applied to the study of the supply chain as well as distribution networks"). The provision of a set of products "Product (object)") and services "Service (economy)") to the final consumer mobilizes different economic actors, each of which manages its value chain. The synchronized interactions of these local value chains create an expanded value chain that can become global (the so-called global value chains[4]). Capturing the value generated along the chain is the new approach that many management strategists have adopted. By exploiting information that flows up and down the chain, companies can try to overcome intermediaries by creating new business models.[3][2].