What does value chain analysis focus on?

Value chain analysis is a strategic tool that focuses on analyzing the internal processes and activities of a company to identify where value is created. This methodology helps organizations evaluate each step of their operations, from inbound logistics to production, marketing, sales, and service. The aim is to understand how each activity contributes to the overall value delivered to customers and to identify areas for improvement that can enhance efficiency and profitability.

By examining internal activities, companies can pinpoint which processes offer competitive advantages and which may need optimization or restructuring. This approach supports decision-making regarding resource allocation, investment in technology, and improvement of operational practices to maximize value creation. Ultimately, value chain analysis provides insights that can lead to better strategic positioning in the market.

The other options focus on customer feedback, employee productivity, and external competition, which, while important, do not capture the essence of value chain analysis as it primarily emphasizes internal company activities.