Value Chain Framework
Value Chain Framework
This is the framework most commonly used to guide analysis of
any firm’s strengths and weaknesses. In this framework, any business is
seen as a number of linked activities, each producing value for the customer.
By creating additional value, the firm may charge more or is able to deliver
same value at a lower cost, either of this leading to a higher profit margin.
This ultimately adds to the organization’s financial performance.
Figure-I : Value Chain
Framework
The value chain framework as shown in Figure-I is a typical value chain within an organization.
Using this framework, it is possible to analyze the organization’s contributions
of individual activities in a business and how they add up to the overall level
of customer value, the firm produces. It is divided into two parts i.e. primary
activities and support activities. The primary activities constitute of the
following:
