Framework library
Value chain analysis
How to use it
Map primary activities and supporting capabilities from inputs through service. Locate where cost accumulates or customers perceive difference, then inspect links between activities.
Worked example
In footwear, design choices affect cutting yield. Check both the design specification and production scrap before blaming the cutting team.
Common pitfall
A process map alone cannot show advantage. Compare the activity economics or customer outcome with an alternative.
- Frame the questionWho can change the terms on which this business earns a margin?
- Apply the frameworkUse Value chain analysis on the worked example above.
- Produce an answerIdentify the mechanism, who benefits from it and the strongest substitute or competitor response.