DEFINITION
Value Chain Analysis

"Value chain analysis": Strategic analysis. Value chain strategic analysis is based on the related concepts that: (1) The different processes or activities undertaken by a firm have the potential to add more value in total (as a 'chain') than each of the individual processes added together. (2) However is is also possible that a firm may be adding less value in a particular current process, than could be secured by outsourcing that activity to an external specialist. Firms should therefore analyse their total chain of activities to ensure that they retain and optimise the activities where they add the most value, and selectively outsource others.
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