What is the Value Chain Analysis template?
Value Chain Analysis is a strategic management process that delves deep into the company’s current activities and helps understand its values and competitive advantage. It involves breaking down the entire business into primary and supporting activities to identify critical areas that affect profitability and efficiency. Primary activities correspond to inbound and outbound logistics, operations, marketing and sales, and after-sales service, while secondary activities include infrastructure, HR management, technological development, and procurement.
Incorporating Value Chain Analysis allows businesses to identify where they add value throughout the supply chain and how to strengthen their position in the market. Understanding the link between each activity in the value chain helps organizations to streamline operations, enhance collaboration with suppliers and customers, and align resources to deliver superior products or services. By assessing each activity’s value contribution, companies can make data-driven decisions to optimize processes, reduce costs, capitalize on strengths, address weaknesses, and gain a competitive edge.
What are the benefits of the Value Chain Analysis template?
Thanks to the Value Chain Analysis template, you can:
- Define your business’s primary and secondary activities.
- Visualize your business’s bottlenecks or inefficiencies within processes and create action points to remove them.
- Improve your competitive advantage on many levels, such as logistics, operations, marketing, sales, etc.
- Analyze and calculate the costs and value of each activity in your company’s value chain.
- Contextualize and understand your current business processes and improve them if needed.
How to use the Value Chain Analysis template in a few steps?
- Open the Value Chain Analysis template on a new whiteboard or add it to an already existing one.
- Start a video call and add your camera stream to the board to see and talk to your team members if you want to conduct the value chain analysis with them.
- List the primary and secondary activities on sticky notes or text blocks and place them in appropriate segments. Primary activities include:
- Inbound logistics — Activities linked to warehousing, receiving, and inventory management.
- Operations — Activities linked to turning raw materials into a finished product.
- Outbound logistics — Activities linked to distribution (including packaging, sorting, and shipping).
- Marketing and sales — Activities linked to marketing and sales, such as promotion, advertising, and strategy.
- After-sales services — Everything that happens after the sale (including installation, training, Q&A, repair, or customer service).
Secondary activities include:
- Infrastructure — Activities linked to the company’s overhead and management (including financing and planning).
- Human resources management — Activities linked to employee recruitment, hiring, training, retention, and compensation.
- Technological development — Activities linked to research and development (including market research, process development, and product design).
- Procurement — Activities linked to sourcing raw materials, equipment, or services.
- Once you identify the primary and secondary activities, determine how much value (or costs) each one adds. Write down your notes on sticky notes by answering questions like: How much does each of the activities increase the customers’ satisfaction? How does it create value for the company? or Does creating XYZ will benefit the business? Connect your answers with lines to know what results from what.
- After you recognize the values and costs of your value chain analysis, analyze the competitive advantage you are trying to achieve. Depending on your goal(s), ask appropriate questions (for instance, If I want to reduce expenses, which steps should I take in lowering costs for the company?) and write down your answers on another set of sticky notes. You can later turn them into actionable Jira or GitHub items to start working on them right away.