Value Chain Analysis Is Vital Importance For Each And Every Firm Essay

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Value chain analysis is of vital importance for each and every firm in the business world. It deals with adding value to each and every step in the working of the firm, that is it adds value right from the raw materials being used to the end products or the services of the firm. The value chain analysis describes the activities the organisation performs and links them to the organisation’s competitive position. The idea of value chain was built upon the insight that a company is a random compilation of machinery, equipment, people and money. Hence, value chain came into existence which can arrange things into systems and systematic activities for which customers will feel it worthwhile to buy a product or even access the services of a particular firm. Value: Value is defined as the total amount of money or revenue that the buyers are willing to pay for a particular product of service of a firm. The value chain deals mainly with the value which is being added to the product in each and every step which it goes through. Margin: The difference between the total value or revenue to the total cost of performing all the activities in the firm gives the margin of the firm. Value Chain: Value chain is defined as the chain of activities for products, which on passing through each stage of the value chain gains extra value which makes it a better product and also the firm offers better services to its customers. It is of utmost importance for each and every firm looking at the

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