ABSTRACT
This chapter contains value chain; the principles on which it is based; underlying assumptions; guidance on application, and relevant issues; and related models. The value chain displays total potential value which equals value activities plus profit margin. The interface and synergy between different activities is often a crucial determinant of the potential for adding value. An organization's value chain may be analysed in relation to value activities outside the organization, such as suppliers and product distribution. Value chain analysis can help to determine areas of competitive advantage. Activities may be assessed to identify opportunities for forward integration into client value chains for example, joint training or environmental audit activities, product development and research. Customer value chain activities may be analysed to better understand customer requirements. Competitors' value chains may be analysed to determine their strengths and weaknesses, which may then be exploited. Examining value chains can help to identify potential partners for joint ventures.
