Value chain analysis (VCA) is a way to visually analyze a company's business activities to see how the company can create a competitive advantage for itself. The VCA will help the company understand how it adds value to something and subsequently how it can sell its product or service for more than the cost of adding the value, thereby generating a profit margin.
Originated in the 1980s by Michael Porter, value chain analysis is the conceptual notion of value added in the form of a chain (or value chain). Every organization has processes and activities that link together and influence the value of the business. Together, these processes and activities form the organization's value chain. Depending on the type of business, typical activities include purchasing, product manufacturing, distribution and marketing. Value chain analysis is a powerful tool during strategic planning. The ultimate goals in performing value chain analysis are to maximize value creation while also monitoring and minimizing costs.
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