What does the value chain analyze in an organization?

The value chain analyzes the internal processes that create value for stakeholders by breaking down various activities that contribute to the organization's overall production and service delivery. This analysis allows a company to examine how each stage of its operations adds value, from inception to final delivery, and identifies opportunities to improve efficiency, reduce costs, and enhance customer satisfaction.

By focusing on the internal processes, the value chain highlights the interconnectedness of different functions within the organization, such as operations, marketing, and logistics, and how they work together to deliver value. This internal perspective is crucial for organizations looking to optimize their strategy, streamline operations, and maximize stakeholder benefits, whether they be financial gains, customer satisfaction, or market position.

In contrast, while understanding the costs associated with product distribution, the impact of external competition, and the effectiveness of management structures are all important components of broader strategic management, they do not capture the essence of the value chain's primary focus on internal processes and value creation.