Strategic cost management - A value chain approach

This paper describes how to use value chain as part of the strategic planning process. There are two components of value chain analysis: the industry value chain and the company's internal value chain. The industry value chain is composed of all the value-creating activities within the industry, beginning with the basic raw material and ending with delivery of the product to the final consumer. Industry analysis helps a company evaluate external, environmentally determined factors, providing a view of the company"s position in the industry. Internal value chain analysis provides a resource-based view of the internal operations of the company. This article provides examples of both industry and internal value chain analysis. An accompanying ease study provides an example of the application of value chain analysis.