Value Chain Analysis

CORE DEFINITION

The value chain, also known as value chain analysis or value chain model, was proposed by Michael Porter in 1985 in his book "Competitive Advantage". Porter pointed out that to develop unique competitive advantages, enterprises need to create higher added value for their goods and services. The business strategy is to structure the enterprise's business model (process) into a series of value-added processes, and this series of value-added processes is the "value chain". The value chain of a general enterprise is mainly divided into: Primary Activities, including the core production and sales processes of the enterprise: Inbound Logistics, i.e., storage and transportation of incoming materials, belonging to the resource market. Operations, i.e., processing and production, belonging to the manufacturer's market. Outbound Logistics, i.e., storage and transportation of finished products, belonging to the intermediary market. Marketing and Sales, i.e., marketing (4P), belonging to the consumer market. After-sales service. These are the links that generate value.