Value Chain Analysis for Business: Elements and Terms of Value Creation

This article discusses the value chain model and its primary and support elements for creating value in business. It also explains the terms of value creation and their reasons. Each value element is analyzed for strategic, business, and operational purposes. The article cites relevant sources for further reading.

Task 3

TABLE OF CONTENTS
TASK 3............................................................................................................................................3
MAIN BODY...................................................................................................................................3
Value chain and value chain models............................................................................................3
Terms value creation should exemplify.......................................................................................4
Analysation of each value element..............................................................................................5
REFERENCES................................................................................................................................6

TASK 3
MAIN BODY
Value chain and value chain models
Value creation for business is when the business use its work and resources for the
creation of something that provides value to the customer base. The value chain model is going
to be used for analysing how the business will create value (Pangestu and Setyorini, 2020).
Value chain is the step by step business model for transforming a product or service from the
idea to a reality. For the development of technology this model the Virtual Value Chain model
is used. This is considered to be effective in the creation of both delivery and exemplification of
the terms of creating value.
Primary elements of the value chain are,
Inbound logistics :
For a new technology this will be inclusion of functions like receiving warehousing and
managing inventory.
Operations :
This is the method which includes the procedures which convert raw materials into the
finished products.
Outbound Logistics :
This is the inclusion of the activities which help in the distribution of the final product to
the consumer.
Marketing and sales :
This includes the strategies to enhance visibility and target appropriate customers such as
advertising promotion and pricing.
Service :
In this element of value chain the main products and the ways in which it enhances the
consumer experiences has been discussed (Jäckering, Fischer and Kehlenbeck, 2019).
The support elements of the value chain are,
Procurement :
This is the activity in which are the tools for obtaining raw materials.
Technological development :

For the development of a new technology it is very important for the organization to have
research and development in the stages which helps in the creation of design and develop
manufacturing techniques for the automation of process.
Human Resources management :
Business is able to create value with the new employees which are talented enough to
improve the business. This is done through involving them and fulfilling the firms business
strategy and helping the business with better design and market for selling the product.
Infrastructure :
The infrastructure of the organization is considered to be the factor which includes both
the company systems and the composition of the management team for the planning, accounting,
financing and controlling of the quality.
Terms value creation should exemplify
Value
creation
terms
Elements of value creation Reason
Hard Sales, procurement, These are elements which create
monetary value for the organization.
Soft Technological development, Service,
Operations
It has no monetary benefit for the
organization.
Qualitative Technological development,
Operations
They have qualitative benefits which
are related to reputation and other
unmeasurable factors.
Quantitative Sales, Human resource management,
procurement, Service
These elements provide the business
with measurable outcomes.
Tangible Sales, procurement, Operations These are measurable in the terms of
quantity (Tang and et.al., 2021).
Intangible Human resource management, Service,
Operations
These are not measured in terms of
quantity.
Intrinsic Human resource management, These are concerns which are more

Technological development, Service internal for company.
Extrinsic Sales, procurement, Operations It is not considered to be the external
element of the practices.
Financial Sales, procurement, Operations These elements are concerned with the
financial performance of the
organization.
Non-
financial
Human resource management,
Technological development, Service
These are not related to the financial
performance.
Analysation of each value element
Strategic :
For the strategy of the business the key elements of value chain are inbound logistics,
operations, marketing, sales and procurement. These elements are important for framing the
strategy because they are able to provide the business with key elements which are important for
the business. With changes in the strategy the business is able to create growth in the operations
that can effect the business and their growth. Depending on in the following elements the
business can frame the strategy.
Business :
The aim of the business is to earn profit thus, the key elements of which create the value
for earning profit in the organization are, Procurement which decides the cost of raw materials,
technological development which effects the cost efficiency of the organization. Sales and
marketing which affects the sales numbers in the business. It also includes Outbound logistics
which effects the business of the organization towards the production of the final product
(Ndiritu, 2020).
Operational :
For the operations of the organization it is important for the business to value the
elements which concerns the key factors that are related to the operations of the business. These
value elements are Human resource management as they are responsible for hiring and firing of
employees. After sales services provided by the organization is also a operational content for the
business.

REFERENCES
Books and Journals
Jäckering, L., Fischer, S. and Kehlenbeck, K., 2019. A value chain analysis of baobab
(Adansonia digitata L.) products in Eastern and Coastal Kenya. Journal of Agriculture
and Rural Development in the Tropics and Subtropics (JARTS). 120(1). pp.91-104.
Ndiritu, S. W., 2020. Beef value chain analysis and climate change adaptation and investment
options in the semi-arid lands of northern Kenya. Journal of Arid Environments. 181.
p.104216.
Pangestu, G. A. and Setyorini, R., 2020, July. Value Chain Analysis At Bank Sampah Bersinar
In Bandung Regency As A Competitive Advantage Strategy. In Proceeding of
International Conference on Management, Education and Social Science (Vol. 1, No. 1,
pp. 8-21).
Tang, H., and et.al., 2021. Value chain analysis of yellow broiler industry in Guangxi, China to
inform H7N9 influenza control strategies. Preventive Veterinary Medicine. 190.
p.105328.