Company Analysis : Value Chain Analysis

1291 Words Oct 23rd, 2016 6 Pages
Value chain represents the internal activities a firm engages in when transforming inputs into outputs.
Value chain analysis is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation.
Value chain analysis is also a strategy tool used to analyze internal firm activities. Its goal is to recognize, which activities are the most valuable (i.e. are the source of cost or differentiation advantage) to the firm and which ones could be improved to provide competitive advantage. In other words, by looking into internal activities, the analysis reveals where a firm’s competitive advantages or disadvantages are. The firm that competes through differentiation advantage will try to perform its activities better than competitors would do. If it competes through cost advantage, it will try to perform internal activities at lower costs than competitors would do. When a company is capable of producing goods at lower costs than the market price or to provide superior products, it earns profits.
Jindie Software (JS), the company I once worked in refers to their supplier as their value chain rather than the supply chain. JS maintains close relationships and communication with suppliers to blend the best technology and service from suppliers into a leading edge mix for consumers. Probably the most unique characteristic of JS’s business model is that JS carries no…
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