Value Chain Analysis Example: Solvents Manufacturing


Value Chain Analysis provides a method for you to identify the ways to reduce costs and increase differentiation. This is a Value Chain Analysis example. You can use the strategic analysis tools provided by Visual Paradigm Online in performing Value Chain Analysis.

What is Value Chain Analysis?

Value chain analysis is a popular strategic analysis tool. It provides a visual method to analyzing a company's business activities in reviewing how the company can create a competitive advantage for itself. Value chain analysis helps a company understands 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. In other words, if they are run efficiently the value obtained should exceed the costs of running them i.e. customers should return to the organisation and transact freely and willingly.

How to perform Value Chain Analysis?

You can perform Value Chain Analysis easily with Visual Paradigm Online. Here are several quick steps:

  1. Create a Value Chain Analysis diagram.
  2. Write down the primary and support activities involved in your business as the headers of compartments.
  3. Find out the cost drivers for those activities and list them as points.
  4. Identify links between activities - reducing costs in one area may reduce cost in another. Identify opportunities to reduce costs.
  5. When you are done, save it (File > Save as) to our cloud repository for future access. You can also export your diagram into an image (PNG, SVG, JPG, PDF and more) and share it with your co-workers.

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