The sequence of activities a company performs in order to design, produce, market, deliver, and support its product or service. The concept of the value chain was first suggested by Michael Porter in 1985, to demonstrate how value for the customer accumulates along the chain of organizational activities that make up the final customer product or service.
Porter describes two different types of business activity: primary and secondary.
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In this example, expected gross profit margins differ significantly within and between value chain modes.
a. ice cream manufacturer
b. foodservice distributor
c. additive producer
a. sugar importer
Additional insights could reveal issues such as:
a. trade regulations that create volatility in the price of imported sugar
b. grocer margins fluctuate between major national chains
c. local regulations