Value chain

The value chain was described and popularized by Michael Porter in his 1985 best-seller: Competitive Advantage: Creating and Sustaining Superior Performance. New York, NY The Freee Press.

The value chain categorizes the generic value-adding activities of an organization. The main activities are: outbound logistics, production, inbound logistics, sales and marketing, maintenance. The supporting activities are: administrative infrastructure management, human resources management, R&D, and procurement. Thanks the costs and value drivers identified for each value activity, the value chain framework made quickly his way to the top management as a powerful analysis tool during strategic planning. The ultimate goal is the maximize the value creation while minimizing the costs.

The delivery of a mix of products and services to the end customer will mobilize different economic actors, each managing its own value chain. The industry wide synchronized interactions of those local value chains in order to meet the customer requirements create a global value chain. Capturing the value generated along the chain is the new game. By exploiting the upstream and downstream information flowing along the value chain the firms will try to bypass the intermediaries creating new business models.