What is Value Chain Analysis?

Value Chain Analysis is a strategic tool used to analyze internal business activities to understand how a company creates value for its customers. It helps identify areas for improvement, cost reduction, and competitive advantage.

The concept was introduced by Michael Porter in 1985 and is divided into two main categories:

• Primary Activities: Inbound logistics, operations, outbound logistics, marketing & sales, and services.
• Support Activities: Firm infrastructure, human resource management, technology development, and procurement.

By optimizing each activity, businesses can enhance efficiency, reduce costs, and improve overall performance.