The Value Chain is a strategic concept that outlines the complete sequence of activities involved in creating and delivering a product or service, from sourcing raw materials to post-sale customer support. Developed by Michael Porter, this framework divides business operations into primary and support activities that collectively enhance value at each production stage. It offers valuable insights into how companies can establish competitive advantage through operational efficiency and well-informed strategic choices.
Primary activities within the value chain encompass inbound logistics, operations, outbound logistics, marketing and sales, and customer service. These interconnected stages ensure the final product or service meets customer expectations while maintaining cost-effectiveness. Support activities—including procurement, technology development, human resource management, and company infrastructure—work synergistically to optimize the performance of primary functions.
A thorough understanding of the value chain enables organizations to pinpoint opportunities for process improvement, cost reduction, and competitive differentiation. This analytical tool proves particularly valuable in strategic planning, helping businesses concentrate on high-value activities that strengthen their market position.
👉 See the definition in Polish: Value Chain: Łańcuch wartości przedsiębiorstwa