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. 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 >>
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