What does value chain analysis focus on?

Value chain analysis primarily focuses on optimizing the internal activities involved in producing and delivering products and services. This concept, developed by Michael Porter, encourages businesses to evaluate each activity within their operations to identify where value is added and how efficiency can be improved. By analyzing each step in the value chain—from inbound logistics to production, marketing, sales, delivery, and customer service—organizations can enhance their competitive advantage through improved quality, faster delivery, or reduced costs.

This focus on optimizing product and service delivery activities allows businesses to pinpoint specific areas that may be lagging or not contributing effectively to consumer satisfaction and overall operational efficiency. Understanding these elements helps a company streamline processes, reduce waste, and ultimately provide higher value to its customers.