Value Chain

Loading the player...

DEFINITION of 'Value Chain'

A high-level model of how businesses receive raw materials as input, add value to the raw materials through various processes, and sell finished products to customers.

BREAKING DOWN 'Value Chain'

Value-chain analysis looks at every step a business goes through, from raw materials to the eventual end-user. The goal is to deliver maximum value for the least possible total cost.

RELATED TERMS
  1. Logistics

    The overall management of the way resources are obtained, stored ...
  2. Do It Right The First Time - DRIFT

    A theory from managerial accounting that relates to just-in-time ...
  3. Just In Time - JIT

    An inventory strategy companies employ to increase efficiency ...
  4. Supply Chain Management - SCM

    Supply chain management is the streamlining of a business' supply-side ...
  5. Bottleneck

    A point of congestion in a system that occurs when workloads ...
  6. Supply Chain

    The network created amongst different companies producing, handling ...
Related Articles
  1. Economics

    Explaining the Value Chain

    A model of how businesses receive raw materials as input, add value to the raw materials, and sell finished products to customers.
  2. Insurance

    Working Capital Works

    A company's efficiency, financial strength and cash-flow health show in its management of working capital.
  3. Fundamental Analysis

    Measuring Company Efficiency

    Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period.
  4. Options & Futures

    Find Investment Quality In The Income Statement

    Use these key attributes to uncover top-level investments.
  5. Entrepreneurship

    Top 6 Factors That Drive Investment In China

    FDI in China surpassed $100 billion in 2010, certain key factors drive foreign direct investment.
  6. Fundamental Analysis

    5 Basic Financial Ratios And What They Reveal

    Understanding financial ratios can help investors pick strong stocks and build wealth. Here are five to know.
  7. Investing

    What Investors Need to Know About Returns in 2016

    Last year wasn’t a great one for investors seeking solid returns, so here are three things we believe all investors need to know about returns in 2016.
  8. Economics

    The Basics Of Business Forecasting

    Whether business forecasts pertain to finances, growth, or raw materials, it’s important to remember that a forecast is little more than an informed guess.
  9. Economics

    Forces Behind Interest Rates

    Interest is a cost for one party, and income for another. Regardless of the perspective, interest rates are always changing.
  10. Investing

    New Year, New Investing Strategy: Exploring ETFs

    Whether you’re a seasoned investor or new to the markets, you need to learn as much as you can about the present environment and how to navigate it.
RELATED FAQS
  1. What are some advantages and disadvantages of value chain analysis?

    There are many advantages of value chain analysis, which all result in a company's ability to understand and optimize the ... Read Full Answer >>
  2. What is the difference between supply chain management and value chain management ...

    The primary difference between supply chain management and value chain management is their view on the flow of production. ... Read Full Answer >>
  3. How can I use value chain analysis to evaluate investment decisions?

    It is possible for an investor to use value chain analysis to evaluate an investment decision since analysis of a company's ... Read Full Answer >>
  4. What are the primary activities of Michael Porter's value chain?

    The primary activities of Michael Porter's value chain are inbound logistics, operations, outbound logistics, marketing and ... Read Full Answer >>
  5. What is the difference between a value chain and a supply chain?

    The difference between a value chain and a supply chain is that a supply chain is the process of all parties involved in ... Read Full Answer >>
  6. How does a strong value chain management team help a company?

    A company's value chain allows it to create a competitive advantage over its competitors. A strong value chain management ... Read Full Answer >>
Hot Definitions
  1. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  2. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  3. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  4. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  5. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center