Question

what does the value chain and value network mean? in your opinion, how does a corporation make the value chain analysis? why does the corporation conduct this analysis? provide your arguments, examples and proves.

Answer 1

A value chain is the series of activities that the company undertakes in order to transform an idea into a product or service from start to finish. This process involves designing the product/service, procurement of raw materials, manufacturing, and finally deployment of the product or service in the market.
A value network is a complex series of connections between the organizations and various individuals in order to create a robust system of mutually beneficial relationships among each other. This is done through interactions between various organizations or people (knowns as nodes) that can be either in the form of money, knowledge, or goods. These interactions are also known as deliverables.

Value chain analysis is conducted by corporations by identifying ways to improve the efficacy of the various steps involved in the value chain. One such popular method is Porter's Value Chain Analysis. In this method, the various activities involved in the value chain are categorized into primary and support activities. The goal is to optimize each of these activities such that value for the customer will be created at minimum cost resulting in an increase in the bottomline of the company. The primary activities include procurement of goods, it's manufacturing, and finally its deployment in the market and after-sales service. While the secondary activities involve the overall infrastructural requirements, the technology being used, and the roles of human resources.

Corporations conduct value chain analysis in order to deliver a superior product in the market which will give them a competitive advantage. It also reduces production costs, thus benefiting both the consumer as well as the corporation.