What is the purpose of a value chain in business?

The purpose of a value chain in business is to define the activities that enable a value proposition to customers. A value chain outlines the full range of activities that businesses engage in to bring a product or service from conception to delivery, and ultimately to the end customer. It emphasizes how various stages of production and operations contribute to the overall value offered to customers.

By identifying key activities in the chain, businesses can analyze where value is created, what processes enhance product offerings, and where efficiencies can be improved. This understanding allows a company to differentiate itself in a competitive market by aligning its operations to better meet customer needs and desires.

In contrast, listing organizational policies and procedures pertains to internal governance rather than the flow of value to customers. Outlining the financial structure of a business offers insights into its economic framework but does not specifically address the creation of customer value. Illustrating technological innovation can demonstrate capabilities and advancements within a company, but it does not inherently link to the core activities that contribute to customer value propositions.