What is Value Chain in Strategic Management-Frequently Asked Questions

Value Chain in Strategic Management

The potential for reducing the multiple procedures that an organization must complete to supply a service or product to its consumers is one of the most valuable contributions that the value chain concept can make to strategic management. Tasks can be categorized as “primary” or “support,” and both contribute to creating value for the client. The value chain approach can analyze entire ecosystems, marketplaces, and individual firms. Strategic management, in the context of this topic, comprises coordinating and aligning the value chains of varied actors in order to achieve common goals. This article will go into value chain in strategic management in detail and provide some examples for your convenience.

Strategic management comprises making decisions that have a substantial impact on an organization’s trajectory and long-term goals. Businesses can use the value chain technique to determine how their customers view them and how their individual activities affect the overall. This is an important step in the process. Strategic management uses the value chain to choose where to invest money, how to improve existing processes, and where to apply fresh concepts. To achieve this goal, the value chain will be used. To explore strategic compensation planning topic from a historical perspective, read this engaging post.

Value Chain in Strategic Management

Strategic management is impossible without a thorough understanding of an organization’s value chain processes. Outsourcing, partnership, and resource allocation decisions all have an impact on competitiveness; executives now have the expertise to make informed judgments. The value chain is also used in strategic management as a diagnostic tool. It makes it easier for businesses to identify areas of inefficiency, waste, and operational lag. This information is critical in order to build precise enhancements. You can use the value chain in strategic management list below for research and educational purposes.

Forward Logistics

Inbound logistics refers to the procedures involved in the procurement, storage, and internal distribution of basic goods. This document outlines every single essential procedure. This task is critical for ensuring that the manufacturing process runs smoothly. In order to build the final product, a vehicle manufacturer must obtain components such as tires, engines, and electronics from many suppliers using efficient inbound logistics.

Studying the Market

Marketing research comprises learning about market trends and consumer behavior. Food and beverage companies conduct extensive market research and often introduce innovative goods in response to their customers’ changing demands.


Post-purchase help, preventive maintenance, and client support are all service goals. Consider an imaginary corporation that sells gadgets and also provides technical help and maintenance. This increases the likelihood of satisfied customers recommending the company to others.

Managing Sales Channels

The primary goal of sales channel management is to build and maintain efficient distribution networks. Every e-commerce platform should strive to attract new customers while increasing conversions from existing ones.

Back-up for Operations

Operations-supporting activities help to streamline basic operational procedures. It includes preventive maintenance, quality assurance, and process improvement. Regular maintenance is critical for passenger safety and aircraft availability, but it comes at a high cost to airlines.

Promotion and Retailing

Sales and marketing are primarily involved with promoting products and persuading potential customers to buy. This includes all areas, such as advertising and sales campaigns, as well as client retention. A high-end fashion company may commit financial resources to advertising efforts that misrepresent the price of their merchandise in order to boost consumer demand.

Assistance with Purchasing

Procurement assistance encompasses a wide range of operations, including supplier relationship management, supply chain optimization, and negotiation. Also, electronic manufacturers’ tight relationships with their component suppliers ensure on-time component delivery and favorable terms for both sides.


Procurement refers to the act of acquiring production inputs such as raw materials, components, and other resources. This is demonstrated by a computer company that outsources product production to other companies.

Advances in Technology

Technology development includes both research and novel advances targeted at improving existing products, processes, and services. Pharmaceutical companies invest much in R&D to create novel treatments that address unmet medical needs.

Management of People Resources

Human resource management is primarily concerned with administration, training, and recruitment. Moreover, a software company protects its long-term competitiveness in a competitive field by prioritizing the recruitment of extraordinarily bright personnel and providing continual training.

Help with the Infrastructure

Transportation and storage facilities, electronic networks, and physical structure maintenance are all examples of infrastructure support activities. Although, a famous e-commerce firm will make significant expenditures in its IT infrastructure to successfully manage large order volumes and provide a good shopping experience to its customers.

Logistics for Export

Distribution to final consumers or retail outlets is a critical component of outbound logistics. A fast food business that maintains food temperature and satisfies delivery deadlines while delivering to several locations is an example of this.

Service Following the Sale

The provision of after-sale assistance assists to keep clients satisfied long after they have made their purchase. Throughout the useful lifetimes of their cars, the majority of manufacturers guarantee that their customers have easy access to replacement components and warranty extensions.


The term “operations” refers to the numerous procedures used to convert inputs (such as raw materials into completed products) into outputs. All manufacturing, assembly, and quality assurance processes have been completed at this point. Consider the smartphone manufacturer, who is responsible for orchestrating the numerous interdependencies between the device’s various components in order to create a faultless product.

Strong Foundations

A company’s infrastructure-related activities provide critical support for the whole value chain. This encompasses the corporation’s legal and financial issues, as well as its management. A global conglomerate that has activities in numerous countries or areas is required to follow all relevant local norms and legislation.


Explain the Meaning of a Value Chain in the Context of Strategic Management

The term “value chain” is widely used in strategic management to depict the sequential activities in product or service manufacturing and distribution. It encompasses core operations like production and promotion, as well as auxiliary activities such as research & development and logistics.

What are some Examples of Value-chain Supporting Activities that you May Give?

There isn’t any dispute about that. Procurement, technological development, human resource management, company infrastructure, operations support, marketing research, channel management, after-sales service support, and infrastructure and procurement support are examples of support activities.

What are the Key Steps in the Process of Creating Value?

Within the context of the value chain, “primary activities” refer to tasks that are directly related to the manufacturing and distribution of the provided product or service. This encompasses everything from receiving inbound products to sending them out, as well as operations, marketing, sales, and customer service.


The value chain notion surpasses the traditional restrictions of hierarchical systems. Supply networks can become more resilient and responsive by including suppliers, distributors, and partners in a company’s value chain into strategic management. Organizations must design methods to differentiate themselves from competitors in today’s highly competitive business environment. Strategic management can benefit from the value chain model since it identifies possibilities to differentiate the firm from competitors by offering distinct value propositions. The value chain in strategic management has a strong role to play in the whole process which you should be aware of it while conducting various business activities.

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