biz-value-chain
Value Chain Analysis
Overview
Value Chain Analysis decomposes an organization into strategically relevant activities to understand where competitive advantage originates. Each activity either adds value (customer willingness to pay) or adds cost. The gap between total value created and total cost is the margin.
When to Use
Trigger conditions:
- User wants to understand which activities drive competitive advantage
- User analyzing cost structure to find savings
- User deciding what to keep in-house vs outsource
- User asks "where do we create value?" or "why are our margins low?"
When NOT to use:
- For industry-level analysis → use Porter's Five Forces
- For product portfolio decisions → use BCG Matrix
- For macro-environment scanning → use PESTEL
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