Value Chain Analysis

Many organizations can not achieve the expected benefit by using erroneous methods or models to determine the true cost of a product or service. Failure to properly assess the costs associated with the business will affect not only profitability but also the competitive advantage of the organization. To evaluate whether the organization failed to achieve optimal resource allocation, organizations need to consider Michael Porter's first method titled Value Chain Analysis (VCA).

This job checks Apple for value chain analysis. In order to conduct an appropriate survey on the organization based on the value chain analysis it is necessary to understand what the value chain analysis is. The concept of value chain analysis was introduced by Michael Porter in the 1980's. Most companies and organizations have activities and processes that can add value to an organization. When these activities are linked, they form an organization 's value chain. These activities usually include factors such as procurement procedures, product manufacturing, distribution, marketing, and so on.

The value chain, also called Porter's Value Chain Analysis, is the concept of business management developed by Michael Porter. Michael Porter explains the value chain analysis in his book "Competitive Advantage" (1985); the value chain is a collection of activities that companies create to create value for their customers. Value creation creates added value, thereby creating a competitive advantage. Ultimately, added value also brings great profitability to the organization. The advantage of Porter's value chain analysis lies in its approach. Porter's value chain analysis focuses on customer-centered systems and activities, not category and accounting expense categories. The system interconnects systems and activities and shows the impact on costs and profits. Therefore, it (Value Chain Analysis) clarifies the reasons for the value and loss seen in the organization.