The value chain It is an element of internal analysis that carries out the study of the important activities of a company, this tool determines which activities provide competitive value or benefit to the product final.
Within the value chain each of the activities of the company is studied and classified for its proper development, this in order to increase the creation of value and in turn reduce costs, since each activity generates a percentage of value and cost.
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In this article you will find:
Examples of value chain
Here are some value chain examples to better understand this type of analysis:
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Example 1
Coca Cola company value chain.
Primary activities
Within this example of the sales giant, there are the following main activities:
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Production: This company perfects its production through a system of bottling factories. It makes beverage concentrates and the final product is made in the bottling plants. Coca Cola sells 68% of its concentrates to bottlers.
- External logistics: The bottling factories are those that distribute the products, through the employees who are in charge of distributing them. Some products are not distributed in all countries, this is decided by the company according to demand and availability.
- Sales and Marketing: This company is one of the largest precursor of large-scale advertising, since its product is known and has a high percentage of sales in all parts of the world.
Secondary activities
In these activities, the Coca Cola company stands out in innovation and decentralization:
- Infrastructure: Coca Cola has an infrastructure that allows a multidomestic strategy, based on decentralized decisions and thus manage to face cultural and market differences in the different countries.
- Use of technology: It is a drink with unique characteristics that differentiates it from the rest of the soft drinks, such as the product line light that gained a high level of market and many different products apart from the traditional one that is still missing.
- Human Resources: Coca Cola is a company totally committed in terms of training its workers, so that they have the ability to develop a quality product that manages to satisfy the competitive market and strives so that within the company there is no type of discrimination.
Final score
The high index of strengths that this great company comprises, is identified through all the advantages it has over all its competitors, which has benefited it in terms of its successful development through the application of its efficient strategies.
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Example 2
This second example is based on a restaurant located in the best area of a city.
Primary activities
- Internal logistics: It is about the acquisition of raw materials, such as ingredients, proteins and vegetables that are needed to prepare meals.
- External logistics: This activity is not carried out, since it does not distribute its products externally from the restaurant, but is marketed to be consumed within the place of sale.
- Operational activity: It is executed by the staff who transform all the ingredients into the final dish.
- Service: This is the main activity of the restaurant, because the reception, the waiters and the good attention is the service that the diners will receive.
- Marketing: It is the advertising on social networks that helps to publicize the restaurant.
Secondary activities
- Infrastructure: It is the place or premises where the restaurant operates.
- Use of technology: They are all those machinery that are necessary within the kitchen to be able to execute the final dishes.
- Human Resources: It is the department that is in charge of making the selection of all the personnel who will do the work of the restaurant and ensures that they are trained.
- Purchases: It is the activity related to the purchase of other fundamental materials such as drinks and cleaning supplies, among others.
Analysis of the value points
These points are based on activities that could provide benefits to the restaurant and at the same time allow it to differentiate itself from the competition.
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Among the activities that can generate competitive advantages is the infrastructure that stands out for being an attractive place and the efficient service that the waiters provide to the diners.
Final score
The characteristics that allow us to see what are the strengths that this restaurant understands compared to its others competitors, has allowed them to carry out innovative strategies and know what their strengths are to highlight as a business.
After seeing these value chain examples, you can determine the analysis of the advantages of skills that one company can have over another, Therefore, it is a tool that allows to know the strengths of a company in its process of production.
