Identify and explain the major purposes of value chain

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Reference no: EM131251129 , Length: 1750 Words

“The value chain provides a useful framework for examining the areas where costs are incurred within a business. The value chain is a set of linked processes or activities that begins with acquiring resources and ends with providing goods and services that customers value” (Langfield-smith et al, 2015, p 44).

REQUIRED:

1) With reference to the above statement, describe what is meant by the value chain.

2) Explain how the value chain may be used to estimate costs.

3) Describe each segment of the value chain and explain why information about costs in the various segments of the value chain can be useful to managers.

4) Identify and explain the major purposes of value chain using examples from your selected annual report/ annual review of one of top 100 manufacturing companies listed on ASX. 

Write response in 1500 words for second part.

Verified Expert

Value chain can be described best as a series of processes that exist in a business, which could add value to the company. It provides an insight into various key business processes and analyses areas of improvement with respect to better resources and expense management. Successful businesses are all about higher value creation. With a given set of resources and under certain set conditions if a business is able to generate more value at the same cost as compared to another, then naturally it would attract more customers. In short value chain can be described as a process within the process itself. It identifies, analyses and improvises the existing processed in all existing processes of an organization for improvement of cost efficiency and long term sustainability of an entity.

Reference no: EM131251129

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