What does value chain analysis focus on?

Value chain analysis is a strategic tool used to understand the various activities within an organization that contribute to its overall value. It focuses specifically on the processes and operations that add value to a product or service, ultimately enhancing customer satisfaction and competitive advantage. By breaking down a company's activities into distinct components, value chain analysis enables a firm to identify areas where value can be created, optimized, or enhanced.

This approach involves looking at both primary activities—such as inbound logistics, operations, outbound logistics, marketing and sales, and service—as well as support activities, including firm infrastructure, human resource management, technology development, and procurement. By understanding how each of these activities contributes to customer value, organizations can make informed decisions to improve efficiency, reduce costs, and innovate offerings.

In contrast, options that focus on stakeholders, employee productivity, or financial risks do not specifically relate to the core purpose of value chain analysis, which is centered around value creation and enhancement for customers.