Increase revenue, reduce costs, gain efficiencies 

 

The value chain is a strategic planning concept developed by Michael Porter, and classifies the value-adding activities of an organisation – the costs and value drivers are identified for each value activity.

The aim is to maximise value creation while minimizing costs.
The primary activities include:  logistics, operations (production), marketing and sales

The support activities include: administrative, human resource management, Research & Development, and outsourcing and procurement.

A key consideration relates to evaluating supplier impact on profitability.

Gaining an in depth understanding of your suppliers’ business strategies, and your competitors allows you to evaluate their potential impact on your profitability, as well as develop strategies and cultivate relationships that foster your competitive advantage.