Value Chain

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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.

INVESTOPEDIA EXPLAINS '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.

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RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. What is the difference between the cost of capital and the discount rate?

    The cost of capital refers to the actual cost of financing business activity through either debt or equity capital. The discount ... Read Full Answer >>
  6. How does the market share of a few companies affect the Herfindahl-Hirschman Index ...

    In economics and commercial law, the Herfindahl-Hirschman Index (HHI) is a widely used measure that indicates the amount ... Read Full Answer >>
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