Value Chain Analysis EXPLAINED | B2U | Business To You

Value Chain Analysis Framework
📌 The Value Chain Analysis (developed by Michael Porter in his 1985 book *Competitive Advantage*) is a systematic approach to examining a company's internal organization and activities.
⚙️ A company gains a competitive advantage by performing its value chain activities more cheaply or better than its competitors.
🔗 The company's value chain is embedded within a larger value system that includes the supply chain of suppliers and buyers.

Porter's Nine Generic Activities
📌 Primary activities are directly involved in the physical creation, sale, delivery, and support of the product/service.
1. Inbound Logistics: Receiving, storing, and disseminating inputs (e.g., raw materials handling, warehousing).
2. Operations: Transforming inputs into the final product (e.g., machining, assembly, testing).
3. Outbound Logistics: Collecting, storing, and physically distributing the finished product to customers (e.g., finished goods warehousing, transportation).
4. Marketing & Sales: Providing means by which buyers can purchase the product and encouraging them to do so (e.g., advertising, promotion, pricing).
5. Service: Activities that maintain or enhance the value of the product after sale (e.g., installation, repair, customer training).
📌 Support activities facilitate the primary activities: Procurement, Technology Development, Human Resource Management, and Firm Infrastructure.

Besseling Technologies Case Study Overview
🤖 Besseling Technologies produces state-of-the-art cleaning robots for greenhouse rooftops, helping growers maximize light penetration and sustainable growth.
🛠️ Operations at Besseling involve technicians assembling complex pieces of technology like the rooftop cleaner.
🌎 Outbound Logistics are complex as customers are scattered globally (China, Australia, home market in the Netherlands), requiring shipping of the finished product worldwide.

Deep Dive into Support Activities
💾 Technology Development is a principal driver of competition, involving everything from software to product design and incorporating contemporary trends like Artificial Intelligence and 3D printing.
👩‍💼 Human Resource Management covers recruiting, training, compensating, and retaining staff to ensure the right skilled personnel are available for all value chain activities.
🏛️ Firm Infrastructure includes general management, planning, finance, accounting, and legal, often supporting the entire value chain rather than individual activities.

Optimizing the Value Chain
📈 The next step after mapping the chain is evaluating how activities communicate and interact to find opportunities for optimization and coordination.
📉 Inefficiency often arises from miscommunications, misalignments, double work, leading to increased costs and lower margins.
🔗 Stronger internal linkages between activities result in a more competitive position and higher margins.

Key Points & Insights
➡️ The core goal of transforming inputs is to create a final product whose value to the customer is greater than the original cost, with the difference being the margin.
➡️ Service is crucial, often considered an extension of the product itself, as satisfied customers can positively impact reputation (while negative experiences can spread fast).
➡️ When analyzing the structure, consider breaking down generic categories; for instance, Marketing & Sales might need separation into a promotional department and a Salesforce department.
➡️ Combining the Value Chain Analysis with external frameworks like PESTEL and Porter's 5 Forces provides a complete understanding of the business environment.

📸 Video summarized with SummaryTube.com on Feb 10, 2026, 01:54 UTC