Value chain analysis template

About the value chain analysis template

Use this template from the Product School of Silicon Valley to gain a better understanding of your business, the value it is creating, and any areas of improvement or opportunities for developing new products and services.

What is value chain analysis and what does it involve?

Value chain analysis is a tool that businesses use to identify the most efficient way to create value for their customers. It involves looking at all of the activities that go into producing a product or service, from raw materials to shipping and delivery. By understanding how each activity contributes to the final product, businesses can identify areas where they can cut costs or improve quality. Value chain analysis can also help businesses to develop new products or services that better meet customer needs. In today's competitive marketplace, value chain analysis is an essential tool for any business that wants to stay ahead of the competition.

When conducting a value chain analysis, businesses will typically start by mapping out all of the activities that are involved in producing their product or service. They will then analyze each activity to determine how it contributes to the final product. Once they have a clear understanding of the value chain, businesses can begin to identify areas where they can improve efficiency and cut costs. In some cases, businesses may also find that they can create more value for their customers by developing new products or services that better meet their needs.

How can value chain analysis help your business improve its performance and competitiveness?

Value chain analysis can help businesses to streamline their operations and reduce costs. By reducing the cost of inputs and improving the efficiency of operations, businesses can increase their profits and become more competitive — it's an essential tool for any business that wants to improve its performance and competitiveness. When used effectively, it can help businesses to improve their efficiency, better understand their customers, and make more informed strategic decisions.

How can you get started with value chain analysis in your organization or business context?

Many businesses find themselves stuck in inefficient routines and wonder how to move forward. Value chain analysis involves mapping out all of the activities that a business undertakes in order to deliver a product or service, from start to finish.

There are many different ways to approach value chain analysis. One approach is the nine-block model. This MURAL template breaks down the value chain into nine different categories:

Primary activities:

1. Inbound logistics

2. Operations

3. Outbound logistics  

4. Marketing and sales

5. After-sales services

Secondary activities:

1. Infrastructure

2. Human resources management

3. Technological development,

4. Procurement

Each category contains a series of specific questions that can help to generate insights.  For example, in the "Operations" category, some of the questions that can be asked include:

• What are our core processes?

• How do we add value to our products or services?

• What are our key competitive advantages?

In order to answer these sorts of questions, businesses need to gather data from a variety of sources.

What are some of the challenges associated with implementing a successful value chain analysis initiative?

While a value chain analysis can be great for identifying opportunities for improvement, it can also be challenging to implement successfully. Some of the challenges associated with implementing a successful value chain analysis initiative include developing an accurate understanding of the value chain, gaining buy-in from decision-makers, and accurately measuring results. By understanding these challenges and taking steps to address them, companies can increase their chances of success when implementing a value chain analysis.

Summary

Value chain analysis is a process that can help businesses improve their performance and competitiveness by understanding the various activities that contribute to the production and distribution of their products or services.

• By taking a holistic view of the value chain, businesses can identify areas where they may be able to streamline processes, reduce costs, and improve customer service.

• There are many benefits associated with value chain analysis for businesses and organizations, including improved efficiency, increased competitiveness, and better decision-making.

• Getting started with value chain analysis typically involves developing a clear picture of the current state of affairs within the organization or business context and then identifying opportunities for improvement.  

• The challenges associated with implementing a successful value chain analysis initiative include gaining commitment from all stakeholders, ensuring data quality, and overcoming resistance to change.

• There are many other reasons why businesses should consider undertaking a value chain analysis project in addition to those already mentioned here. For example, it can help companies understand how their industry is evolving and identify new sources of competitive advantage.

Additional resources

• How to Justify Software Costs Without Speculating About the Value-Add

• How to Create a Winning Value Proposition for Your Product

• Adding Value to Your Product

• Product Templates: Porter’s Value Chain