Porter’s Value Chain Analysis
What is a Value Chain Analysis? The value chain also known as Porter’s Value Chain Analysis is a business management concept that was developed by Michael Porter . In his book Competitive Advantage (1985), Michael Porter explains Value Chain Analysis; that a value chain is a collection of activities that are performed by a company to create value for its customers. Value Creation creates added value which leads to competitive advantage. Ultimately, added value also creates a higher profitability for an organization. Porter’s Value Chain Analysis The strength of the Porter’s Value Chain Analysis is its approach. The Porter’s Value Chain Analysis focuses on the systems and activities with customers as the central principle rather than on departments and accounting expense categories. This system links systems and activities to each other and demonstrates what effect this has on costs and profit. Consequently, it (Value Chain Analysis) ma...