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Value Chain Definitions
Value Chain Definitions
Definition of each activity in the value chain.
Type
Activity
Description
Primary Activity
Inbound logistics
These are all the processes related to receiving, storing, and distributing inputs internally. Your supplier relationships are a key factor in creating value here.
Operations
These are the transformation activities that change inputs into outputs that are sold to customers. Here, your operational systems create value.
Outbound logistics
These activities deliver your product or service to your customer. These are things like collection, storage, and distribution systems, and they may be internal or external to your organization.
Marketing & sales
These are the processes you use to persuade clients to purchase from you instead of your competitors. The benefits you offer, and how well you communicate them, are sources of value here.
Service
These are the activities related to maintaining the value of your product or service to your customers, once it's been purchased.
Support Activity
Firm infrastructure
These are a company's support systems, and the functions that allow it to maintain daily operations. Accounting, legal, administrative, and general management are examples of necessary infrastructure that businesses can use to their advantage.
Human resource management
This is how well a company recruits, hires, trains, motivates, rewards, and retains its workers. People are a significant source of value, so businesses can create a clear advantage with good HR practices.
Technology development
These activities relate to managing and processing information, as well as protecting a company's knowledge base. Minimizing information technology costs, staying current with technological advances, and maintaining technical excellence are sources of value creation.
Procurement
This is what the organization does to get the resources it needs to operate. This includes finding vendors and negotiating best prices.
Source:
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