Attaining Excellence in the Things That Really Matter

– By Lattapon Injaroen

Value Chain Analysis is a helpful device for working out how you can develop the best possible value for your clients. In business, we are paid to take raw inputs, and to “add value” to them by turning them into something of worth to other people. This is easy to see in manufacturing, where the producer “adds value” by taking a raw material of little use to the end-user (as an example, wood pulp) and converting it into something that individuals are prepared to pay cash for (e.g. paper). However, this concept is just as vital in service markets, where individuals use inputs of time, understanding, equipment and systems to produce services of real value to the person being served– the client. In addition, bear in mind that your clients are not always outside your company: they can be your bosses, your co-workers, or individuals who depend upon you for exactly what you do.

On an individual level, if you add a lot of value to your group, you will certainly stand out in what you do. How do you discover out where you, your team or your company can create value?

This is where the “Value Chain Analysis” device works. Value Chain Analysis assists you determine the methods in which you produce value for your clients, and then helps you believe with how you can optimize this value: whether with outstanding items, great services, or tasks well done.

Note: This post looks at a basic strategy to utilizing value chains. Harvard Business School professor Michael Porter in his book Competitive Advantage established a more structured technique.

Ways to Use the Tool:

Toon Businesswoman Two 64 smallValue Chain Analysis is a three-step procedure:

1. Activity Analysis: First, you determine the activities you undertake to provide your item or service;

2. Value Analysis: Second, for each activity, you believe with exactly what you would do to include the best value for your client; and

3. Examination and Planning: Thirdly, you assess whether it is worth making modifications, and then plan for action.

We follow these through one-by-one:


Step 1– Activity Analysis

The initial step to take is to brainstorm the activities that you, your team or your business undertakes that in some method contribute to your consumer’s experience. At an organizational level, this will include the systematic business procedures that you make use of to serve the client. These will certainly include advertising of your services or items; sales and order taking; operational procedures; delivery; support; and so on (this might also involve numerous other steps or procedures certain to your market).

At a personal or team level, it will certainly involve the organized flow of work that you perform. However, this will likewise include other things too. :

-How you recruit individuals with the skills to provide the very best service.

-How you motivate yourself or your team to perform well.

-How you stay current with the most reliable and effective techniques.

-How you select and establish the innovations that provide you the edge.

-How you get feedback from your customer on how you are doing, and how you can enhance further.

Pointer: If you perform the brainstorming behind the Activity Analysis and Value Analysis with your team, you will probably get a richer answer than if you do it on your own. You may likewise find that your team is more likely to “purchase into” any conclusions you draw from the workout. The conclusions will be as much theirs as yours.

When you have brainstormed the activities, which include value for your company, list them. A beneficial method of doing this is to lay them out as a streamlined flow chart running down the page– this provides an excellent graph of your “value chain”.


Step 2– Value Analysis

Now, for each activity you have actually identified, list the “Value Factors”– the things that your clients’ value in the method that each activity is carried out. As an example, if you’re considering a telephone order-taking procedure, your customer will certainly value a fast answer to his or her call; a courteous way; effective taking of order details; fast and well-informed answering of questions; and a efficient and quick resolution to any issues that occur.

If you’re thinking about shipping of an expert service, your client will certainly most likely value a precise and correct option; an option based upon entirely updated information; an option that is plainly revealed and easily actionable; and so on.

Beside each activity you have actually identified, write down these Value Factors. Beside these, compose down what has to be done or changed to supply great value for each Value Factor.

Step 3– Evaluate Changes and Plan for Action

By the time you have actually finished your Value Analysis, you will most likely be ignited for action: you’ll have generated a lot of ideas for enhancing the value you provide to customers. In addition, if you could deliver all of these, your service could be remarkable!

Initially, pick out the fast, simple, cheap wins– go for some of these, as this will enhance your team’s spirits no end. Others will provide only marginal enhancements, but at great cost. Prioritize the remaining jobs and strategy to tackle them in a possible, detailed way that provides stable enhancement at the very same time that it stays your team’s enthusiasm going.

Pointer: If you have a strong adequate relationship with one or more of your clients, it could be worth providing your conclusions to them and getting their feedback– this is a great way of either verifying that you are ideal or of getting a much better understanding of exactly what they actually want.


Lakshmi is a software development manager for a software home. She and her team handle short software improvements for many customers. As part of a team development day, he and her group use Value Chain Analysis to think about how they can deliver exceptional service to their clients.

Throughout the Activity Analysis part of the session, they determine the following activities that develop value for customers:

Toon Young Businessman 16 smallOrder taking

-Enhancement specification


-Software development.

-Programmer screening.

-Secondary screening.




Lakshmi also identifies the following non-client-facing activities as being essential:.

-Recruitment: Choosing individuals who will certainly work well with the group.

-Training: Helping brand-new group members end up being reliable as rapidly as possible, and helping employee discover new software, strategies and innovations as they are established.</a>” frameborder=”0″ allowfullscreen>

Next, she and her group concentrate on the Order Taking procedure, and recognize the aspects that will certainly provide the best value to customers as part of this process. They determine the following Value Factors:.

-Giving a quick answer to incoming call.

-Having a great understanding of the customer’s company, system and circumstance, so that they do not waste the consumer’s time with unnecessary description.

-Asking all the best concerns, and getting a full and accurate understanding of the customer’s needs.

-Explaining the development procedure to the consumer and handling his or her expectations about the likely schedule for shipment.


  • They then look at exactly what they have to do to deliver the maximum value to the client.
  • They then take a look at what they have to do to provide the maximum value to the client.
  • They then do the same for all other processes.


When all brainstorming is complete, Lakshmi and her team may have the ability to identify quick wins, turn down low yield or high cost options, and agree their concerns for execution.

Secret Points:.

Value Chain Analysis is a helpful way of believing through the methods in which you deliver value to your consumers, and evaluating all of the things you can do to optimize that value. It takes location as a three phase procedure:.

-Activity Analysis, where you determine the activities that contribute to the shipping of your services or product.

-Value Analysis, where you determine things that your clients value in the way you conduct each activity, and afterwards work out the changes that are needed.

-Evaluation and Planning, where you choose what changes to plan and make how you will certainly make them.

Using Value Chain Analysis and by following it through to action, you can accomplish quality in things that actually matter to your customers.

Value Chain Analysis is a beneficial technique for working out how you can produce the greatest possible value for your clients. How do you discover out where you, your team or your business can produce value?

Pointer: If you bring out the brainstorming behind the Activity Analysis and Value Analysis with your group, you will certainly virtually definitely get a richer response than if you do it on your own. When you have brainstormed the activities, which include value for your business, list them. As part of a group development day, he and her team use Value Chain Analysis to believe about how they can provide outstanding service to their customers.

CMB Marketing, CrossMedia Branding & Marketing

B. Lattapon Injaroen

Creative Marketing Manager

Niels Bohrs Vej 8, Idea Hause

6700 Esbjerg, Danmark,

Telefon: +45 3035 8979,


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