The Value Chain Diagram was proposed and popularized by Michael Porter in his best-selling book, Competitive Advantage: Creating and Sustaining Superior Performance. Since then, it has transformed into a necessary tool to study the value-drivers of a firm’s product or service range. The Value Chain helps in this analysis by dividing crucial functions into primary or secondary (or support) functions. The product is taken across the primary functions in order and at each stage, value is added to the product and cost is incurred in undertaking the same.
This diagram, therefore, visually illustrates the key value-centric factors and helps plan how cost centers can be reduced (tucked inwards)so that margins expand, keeping the same end- user price.
These can be used in strategic planning sessions or even to study supply chain efficiencies. To suit your PPT, the text, shape, size, colors and number of factors can be customized with a click of the mouse. Download this editable diagram to highlight the value drivers in your business.
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