Global Business Strategy, 2nd Edition

CHAPTER 10

Globalizing the Value Creation Infrastructure

Introduction

The term value chain refers to how companies procure raw materials, add value to them through production and other processes to create a finished product, and then sell the finished product to consumers. A supply chain represents the steps it takes to get the product or service to the customer.¹ Put differently, while a supply chain involves all parties in fulfilling a customer request, a value chain is a set of interrelated activities a company uses to create a competitive advantage.

The two concepts are closely related. In a global competitive environment, individual companies no longer compete as autonomous entities, but as supply chain networks. Instead of brand versus ...