Value Chain Analysis

What is Value Chain Analysis

Value Chain Analysis helps you to identify and analyse the processes by which an organisation creates value.

The Value Chain separates processes into:

  • Core Processes: the main processes by which the organisation adds value to inputs in order to create outputs and ultimately the products and services it provides.
  • Support Processes: additional processes which are necessary for the efficient and effective operation of the organisation.

Core Processes from the Value Chain Analysis also appear as Key Activities on the Business Model Canvas. Support Processes do not.

How to use the value chain

When you first use the Value Chain, StratNavApp.com will create a default set of core and supporting processes.

You can then edit, delete or add processes to get to the specific value chain for the organisation in question. You can also drag and drop processes to sort them.

Once you've described the value chain you can click on any process to add more detail, analysis and insights. See Working with Processes.

What to use value chain analysis for

You can use the value chain for a number of purposes:

  1. Descriptive: the value chain provides a framework for developing a common language and holistic description for talking about the organisation. This is useful for overcoming organisational biases and siloed thinking.
  2. Prescriptive: the value chain can be used as part of the process of developing a target operating model for an organisation, understanding any gaps between the current operating model and target operating model, and developing plans (initiatives) for closing those gaps.
  3. Analytical: the value chain provides a framework for identifying strengths and weaknesses (and, to a lesser extent, threats and opportunities) that are more grounded in the reality of the organisation. This is useful for avoiding the more abstract insights that many organisations fall back on and which mitigate against strategic thought and action. StratNavApp.com will ensure that any strategic insights generated in this way appear in the appropriate models in the Analysis -> Insights section of the tool.

The Value Chain is one of the more established strategy models, having been introduced by Michael Porter in his influential book "Competitive Advantage".

See also:


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