Value Chain (Porter)

Overview

What if you could map out every step that turns raw materials into a finished product and uncover where your company can gain an edge? That’s exactly what Michael Porter’s Value Chain does—it breaks down a business into primary and support activities, showing how each contributes to creating value.

Key Components

Used by companies to analyze efficiency, identify cost advantages, and spot opportunities for innovation, it’s a powerful tool for strategic thinking. Visualized as a chain, it connects inbound logistics, operations, outbound logistics, marketing, sales, service, and support functions like HR and technology.

How to Apply

By examining each link, businesses can pinpoint where to invest, improve, or differentiate. Understanding the value chain helps organizations see the big picture and make smarter decisions.

Key Insight