Each of the links that contribute in some way to that an item reaches the consumer's hands, are part of the value chain of a product. Discover their keys in this post!
A value chain involves all companies that participate from which a raw material is extracted until the article end you are going to buy the consumer.
That is to say, if we talk about any article of clothing involved from the manufacture of yarns, fabric, buttons, transport, industrial manufacturing or manual as the shirt and the packaging, to finally get to your store where the retailer will have the task of implementing various marketing strategies to achieve that finally the product reaches the hands of the final consumer.
The review and analysis of each of the parties involved in the value chain of a productit is an opportunity for the company maximize efficiency and create a competitive advantage to improve your profitability and market position.
Keys to understanding the value chain of a product
To better understand the functioning of the value chain of a product, it is necessary to know the five main phases involved to add value and create a competitive advantage.
1. Inbound logistics
The first activity involved in the value chain is the inbound logistics, which includes all the receiving, storage, and inventory of the raw materials used for production.
2. Operations
The second part of the value chain corresponds to the various operations that involves all the efforts made to to convert raw materials into finished products.
3. Outbound logistics
The third phase of the value chain of a product it is the logistics of output, this occurs subsequently to when they complete all the operations and the product is ready to be sold to the client.
4. Marketing
The sales and marketing of the product are part of the fourth part of the value chain, which includes all the strategies used for to improve the visibility of the products, as well as to meet the needs of consumers with the product and so to facilitate the sale to the final consumer in the store.
In this stage include the selection of channels, as well as the advertising campaign and the determination of prices.
5. Customer service
The fifth and last step of the value chain, a description of all the activities that help create better experiences for the consumer, as, for example: the customer service, reimbursement programs, and assurance services.
Analysis of the value chain
The value chain of a product it is a very helpful way to know how to work the various stages involved and thanks to this you can see in detail each item for so early detection of any error, but also the successes.
Its use is very convenient for reduce costsknowing the appropriate place of the string in which to perform them so as not to affect adversely the quality of the product.
For example, the analysis may determine the use of an outsourcing strategy to outsource to other companies in the development of certain processes to achieve increased performance and economic benefits.
Conclusion
As we have already seen, the value chain of a product it is used to describe all the processes, starting from the moment in which businesses receive raw materials, add value to these inputs through various processes for the manufacture of a finished product which is then sold to customers who come to the various shops.
Companies constantly perform analysis of the value chain with the purpose of evaluate each step that involves the production of a productwith the purpose to identify ways of increasing the efficiency of the chain, with the overall goal of achieving the maximum value at the lowest cost possible and obtain a competitive advantage.
