Value chains are an important part of any business, no matter the size. This module will look at what a value chain is and how it can be used to improve profitability. A value chain is a series of activities that provide value to the customer. It starts with raw materials and moves through the production process until it reaches the customer. The aim of a value chain is to create a product that satisfies customer needs and maximizes profits for the company.
Value Chains are composed of four main elements: inputs, activities, outputs, and customers. Inputs include resources such as labor, capital, materials, energy or information that are used in production processes in order to create outputs such as goods or services which are then sold to customers who use them for their own purposes.
Value chain analysis is a process of understanding the relationships between different parts of an organization. It is used to identify possible ways for enhancing the efficiency and effectiveness of an organization's operations and to help managers understand how changes in one part of the value chain will affect other parts.