Value Chain Analysis
By: A Staff Writer
Updated on: Jul 19, 2024
What: Breaks down a company’s activities into those directly creating value (primary) and those that support them (secondary). Looks for areas to cut costs or differentiate from the competition.
Who: Michael Porter.
Why: Makes entrepreneurs think critically about every step, uncovering hidden waste or untapped advantages.
When: If your profit margins are slim, when facing price pressure from competitors, or when launching a new offering.
How:
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- Map out your primary and secondary activities.
- Scrutinize each for potential improvement (cost reduction, increased value to customers)
- Implement changes strategically to gain an edge.