Value Chain Activities
A company’s value chain identifies the primary activities that create value for the customers and the related support activities. It is a primary analytical tool for strategic cost analysis. It represents the internal activities a firm engages in when transforming inputs into outputs.
The value chain activities are:
The goal of these activities is to create value that exceeds the cost of providing the product or service, thus generating a profit margin.
- Inbound logistics include the receiving, warehousing, and inventory control of input materials.
- Operations are the value-creating activities that transform the inputs into the final product.
- Outbound logistics are the activities required to get the finished product to the customer, including warehousing, order fulfillment, etc.
- Marketing and Sales are those activities associated with getting buyers to purchase the product, including channel selection, advertising; pricing, etc.
- Service activities are those that maintain and .enhance the product’s value including customer support, repair services, etc.