It is known as value chain yet theoretical concept which describes the way in which the actions and activities of a company . Based on the definition of chain , it is possible to find in it different links involved in a economic process : It starts with the raw material and reaches the distribution of the finished product. In each link, it is added value , which, in competitive terms, is understood as the amount that consumers are willing to pay for a particular product or service.
The value chain analysis allows the optimization of the production process, since it can be appreciated, in detail and at each step, the operation of the company. The costs reduction and the search for efficiency in the use of resources are usually the main objectives of the entrepreneur when reviewing the value chain. In this way, every firm manages to expand its margin (result of the difference obtained by comparing the total value with the cost of the activities).
On the other hand, the study of the value chain makes it possible to achieve strategic advantage , since there is a chance to generate a value proposition that is unique in the market .
It is important to underline in this sense that in the economy and also in the configuration of the aforementioned value chain it acquires a relevant and large-scale role what is called the competitive landscape that is also fundamental in said advantage.
Specifically, a total of four aspects of this panorama are established that strongly influence the chain at hand. Thus, in the first place, there is what is called the degree of integration and that is a term that defines all those activities that are carried out in the house or company itself and not in other independent companies.
Secondly, we find the industrial landscape that is the set of industrial sectors that are related to each other and that are in which our company competes thanks to a strategy perfectly defined and coordinated with the clear objective of achieving the goals that have been marked.
The third element that can influence the value chain is the segment landscape. More precisely with it, reference is made to the variations that may be affected both what the product is in particular and the buyers thereof.
And finally, the fourth element that concerns us is the geographical panorama. As its own name indicates, under that denomination they include what are the countries, counties or regions where the company competes based on a perfectly coordinated strategy.
There are specialists who distinguish two subsystems in the conformation of the value chain. A demand chain , which involves the processes linked to the creation of demand, and a supply chain , dedicated to satisfying demand in a timely manner.
It is also possible to differentiate between two types of valuable activities. One of them is related to primary activities , a group of actions focused on the physical elaboration of each product and its transfer to the buyer. The support activities On the other hand, they support the primary schools and involve the participation of human resources, inputs and technology, for example.