Value Creation Chain

Every business performs a series of functions that create or add value somehow. These steps in a value creation chain lead to the final product or service that you sell at a price that exceeds the total costs of producing it. This excess is your profit. To increase your profit, you must first examine every step of your value creation chain. Sometimes, just one change in how you do business can lead to dramatic changes in your results. Each part of the value creation chain consists of an activity of some kind.

  • You have to buy, manufacture or produce the product or service that you will sell to your customers.
  • You have to advertise, sell and deliver what you sell.
  • Finally, you have to ensure that your customers are so happy with their purchase that they buy again and tell their friends about you.