Value Chain

N's spirit Basic MBA > Value Chain

Value Chain

Value Chain shows a process adding value in each step from law materials to consumption by end users.

By Value Chain analysis, the company can find which stage in a business process contributes to establish competitive advantage compared with other companies. Value Chain also tells us KSF.

Image of Value Chain is as follows.

Value Chain

Form of Value Chain should be changed by business process.

Examples of Value Chain

Value Chain

Value Chain

Service industry
Value Chain

Value Chain

Further example of Value Chain

Value Chain can be applied to not only one company but also industrial process like law materials firm, production firm, delivery firm, sale firm and consumers.

Industrial process

Break down industrial process to detailed process of a company
Value Chain

How to make and use Value Chain

Specify main steps
Firstly, main steps of a business should be clarified roughly

Divide important step into details
Key step should be divided into more detailed steps. Key step means a step contributing differentiation or a step needing higher cost than other steps.

Analyze strengths and weaknesses of both company and competitors.
After clarifying several important steps, the company should analyze how different they are between company and competitors and whether its differentiation meet KSF of the industry.

Smile Curve

Value Chain of electrical equipment industry is sometimes called Smile Curve because its added value is parabolic in shape.


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What is the corporate strategy?
Ansoff Matrix
PPM (Product Portfolio Management)
GE's Business Screen
Value Portfolio
Pattern of Global Strategies
Porterfs Corporate Strategy
Strategy by Positioning in an Industry
Blue Ocean Strategy
Five Forces Analysis
Advantage Matrix
Strategic Positioning Analysis
Value Chain
Service Profit Chain
Resource Based View
Seven S
PEST Analysis
PLC (Product Life Cycle)
Technology Life Cycle
MOT (Management of Technology)
Economic Analysis of Business
Experience Effect
3C Analysis
SWOT Analysis
PDCA Cycle
Seven Domains
Delta Model
Process of Environmental Analysis
PMS (Product Market Strategy)
Framework of Competitor Analysis
Examples of KSF


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