Value Chain

Value Chain



Value Chain

            A value chain is referred to as a set of activities where an organization operating in a specified industry as means of delivering a valuable service or product into the market. The whole process is determined by the observation of the organization as a system and is composed of various subsystems (Magretta, 2012). At each level, there are various inputs, followed by the transformation process that enables the value addition criteria and subsequent outputs. At the three stages, there is consumption of resources like finances, labor, equipment, materials, land, buildings, administration, as well as the overall inclination towards the effective management. The various mechanisms used in the transformational process of value addition are responsible for determination of the costs and effects realized in the gains made. The main purpose of value chains is to enable a gain on the competitive advantage as well as differentiation from other services and goods in the market. It ensures that the overall process creates uniqueness and assurance of quality for better and strategic market placing.

            The core is representative of the value proposition with distinctive management. The core represents the exact value for the organization in order to ensure that the customer is guaranteed of unique competition against other similar products or services. The choice should ensure that there is specific tailored value chain in order to succeed in the process. According to Magretta (2012), Porter uses the value addition definition to get the answers of the particular customers, the needs to be met in the process as well as relative pricing, which will be enabled on the product or service to the customer while regarding the company profitability. The linchpin according to Porter is reminiscent of the dependent choice made in the value addition. They are the trade-offs that accompany the contribution and sustainability of the competitive advantage as per the organization’s needs.

                The fit is also termed as the amplifier of the value addition process. It is the activities concerned with relations between the processes undertaken to increase the competitive advantage. There have to be varied reasons for the relations as the choices can be related or interdependent. There is no clear-cut solution to the strategy adopted by the organization, as they are many. The connections made form one thing to another improves the chances of its success. Continuity is specific as it is carried on over time. It is the enabler of value addition through unique proposition with cores of strategies used. They affect the pricing from other services and products, hence making them acceptable to the customers and sustaining them over time (Lindgreen, Maon, and Vanhamme, 2013). It makes sure that the competitors cannot make the same, even if it is copying. According to Porter, it fosters all the other elements of the value addition process, as it determines the results over time and longevity measures. It safeguards the threat of rivals’ new matches in the market, as the customers are satisfied with the competitive advantage.

            I have ever heard of value chain before due to management and business courses, which regard strategic decisions made by organizations. Value chain makes sense to me as it shows the deliberate processes undertaken by firms in creating uniqueness and lasting over time without losing their grip on customers. It helps set apart companies over time due to the longevity of the process used in ensuring that the services and products are differentiated from the rest in the market.  


Lindgreen, A., Maon, F., & Vanhamme, J. (2013). Sustainable value chain management: A research anthology.

Magretta, J. (2012). Understanding Michael Porter: The essential guide to competition and strategy. Boston, Mass: Harvard Business Review Press.

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