25 Need-To-Know Management Models

Chapter 7

The value chain

• Why use it? The value chain model can provide helpful insights into the effectiveness of the chain of activities that deliver the organisation’s product or service. The model divides the generic value-adding activities of an organisation into primary and secondary activities. An advantage or disadvantage may be identified within any of the activities detailed.
• What does it do? In order to analyse a company’s competitive advantage (or lack of one), the value chain can be used to look in detail at the company’s (discrete) activities. Once the firm’s activities have been broken down to a sufficient level of detail, the relative performance of each can be analysed.
• When to use it? The model can be used to analyse the performance ...