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You are here: Home / imp / What is a Value Chain Analysis? What is the Process of implementing it?

What is a Value Chain Analysis? What is the Process of implementing it?

Meaning of Value Chain

A value chain is used to describe all the activities it takes to create a product, from start to finish (raw material to finished product) for example, design, production, distribution, etc. 

Meaning of Value Chain Analysis

Value chain analysis is the way for business to analyze the activities they perform to create a product. Once the activities are analyzed a business can use the result to evaluate ways to improve its advantage. 

The following steps below illustrate the general steps that are taken to conduct a Value chain study/analysis:

A. Determine the business’ primary and support activities.

Together, the primary and support activities make up the value chain. And they include each action required in the development of a product or service, from raw material to final product.

Value Chain Analysis

Primary and Support Activities

Identifying the primary and support activities is the first step in creating a value chain analysis. These are the key processes and systems a business uses to develop is product or service.

Primary Activities

There are five primary activities and they include all the actions that go into the creation of a business’ offering.

1. Inbound Logistics

This is how materials and resources are gained from suppliers before the final product or service can be developed.

2. Operations

Operations are how the materials and resources are produced, resulting in a final product or service.

3. Outbound Logistics

Once a product or service is finished, it needs to be distributed. Outbound logistics describes this delivery process.

4. Marketing and Sales

This is how your product or service is presented and sold to your ideal target market.

5. Services

This is the support a business provides for the customer which can include support and training for the product, warranties, and guarantees.

Support Activities

Support activities help the primary activities in creating an advantage over competitors, and they include:

1. Firm Infrastructure

This entails all the management, financial, and legal systems a business has in place to make business decisions and effectively manage resources.

2. Human Resource Management

Human resource management encompasses all the processes and systems involved in managing employees and hiring new staff. This is especially important for companies that provide in-person service, and excellent employees can be a competitive advantage.

3. Technology Development

Technology development helps a business innovate. And technology can be used in various steps of the value chain to gain an advantage over competitors by increasing efficiency or decreasing production costs.

4. Procurement

This is how the resources and materials for a product are sourced and suppliers are found. The goal is to find quality supplies that fit the business’ budget.

B. Analyze the value and cost of the activities.

The team tasked with creating the value chain analysis should brainstorm ways each activity provides value to customers and the business as a whole. Compare the activity to the competitive advantage you’re trying to achieve (cost leadership or differentiation) and see if it supports the goal.

After the value analysis is complete, take a look at the cost of the activities. Is the activity labor intensive? How much does X raw material cost? Asking questions similar to these will help identify which activities are cost-effective and which are not. This where areas for improvement can be identified.

C. Identify opportunities to gain a competitive advantage.

Once the value chain analysis is complete, the primary stakeholders in the business can see an overview of where the business is excelling and where improvements can be made operationally.

Begin with the improvements that take minor changes and provide high-impact results. After the easy wins are identified and actioned, you and your team can tackle the bigger challenges that might be hindering efficiency.

The value chain analysis gives businesses a clear idea of how to adjust their actions and processes to provide the most value to their target market and increase profit margins for the company.

 

Can you give an example of a Personalized or Sophisticated Scam carried out with tailored communication?

What are sophisticated scams? Can NGOs be targeted with sophisticated scams?

74. How can the NGO ensure that its digital fundraising strategies remain authentic and aligned with its mission while embracing innovative trends?

73. What online fundraising tools (e.g., crowdfunding platforms, peer-to-peer fundraising) can the NGO leverage to maximize contributions?

72. How can the NGO use data analytics to optimize digital fundraising campaigns and target specific donor segments?

71. What strategies can be used to convert social media followers into recurring donors or long-term supporters?

70. How can the NGO create a seamless donation experience on its website and mobile platforms to encourage online giving?

69. What role does email marketing play in the NGO’s overall digital fundraising strategy?

68. How can the NGO leverage influencer partnerships or brand ambassadors to amplify its message and fundraising efforts?

67. What metrics (e.g., engagement rates, follower growth, click-through rates) are used to measure the success of social media campaigns?

66. How can the NGO use paid advertising (e.g., Facebook Ads, Google Ad Grants) to increase visibility and attract new donors?

65. What is the NGO’s social media content strategy, and how often are posts made to keep followers engaged?

65. What is the NGO’s social media content strategy, and how often are posts made to keep followers engaged?

64. How can the NGO craft a compelling digital story to engage supporters and inspire donations online?

63. What social media platforms are most effective for reaching the NGO’s target audience (e.g., Facebook, Instagram, Twitter, LinkedIn)?

62. What mechanisms are in place for stakeholders (e.g., donors, beneficiaries, staff) to provide input or feedback on governance and leadership decisions?

61. How does the NGO promote diversity, equity, and inclusion within its leadership, board, and organizational structure?

60. What succession planning strategies are in place to ensure continuity in leadership during transitions?

59. How are conflicts of interest managed within the board and leadership team to ensure ethical governance?

58. What is the process for evaluating the performance of the board, executive leadership, and the NGO as a whole?

57. How does the board work with the executive leadership to establish clear boundaries between governance and management?

56. What is the role of the executive leadership (e.g., CEO, Executive Director) in driving the organization’s operations and achieving its goals?

55. How does the board ensure that the NGO is adhering to its mission, values, and strategic objectives?

54. What governance policies and procedures are in place to ensure accountability, transparency, and ethical decision-making?

53. How often does the board meet, and what processes are in place to ensure productive and effective meetings?

52. What is the process for selecting, appointing, and renewing board members to maintain a strong and diverse leadership team?

51. How is the NGO’s board structured, and what skills or expertise are required from board members to ensure effective leadership?

50. What are the roles and responsibilities of the board of directors, and how do they contribute to the NGO’s overall governance?

49. How does the NGO balance quantitative (e.g., numbers, statistics) and qualitative (e.g., stories, experiences) data in its evaluations?

48. What role do donors and stakeholders play in the M&E process, and how are results communicated to them?

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