2.Segment the activities into Primary and Secondary Activities with a discussion of how EACH primary activity contributes directly to the bottom line, and why a secondary activity does not do so. 3.Determine which activities in the Secondary category should be outsourced, because it is cheaper and efficient to do so.The reason you do value chain analysis, is to find out if there are activity duplications in the company's value chain that could be eliminated. You would separate the activities (tasks the employees perform everyday they come to work) into primary and secondary activities. Primary activities generate revenue for the firm, secondary, or support activities do not.So, the focus of your analysis should be to detect redundant activities that could be merged, eliminated, or outsourced entirety to a third party that could perform the same activities much better at a lower cost. Your value chain analysis should also reveal the center of gravity for the firm - what the firm does best, also known as its core competency. The core competency gives the firm its competitive advantage.At the end of this section and before you start work on the next section, create a subtitle called, "Analysis of the Gross Margin Elements in the Value Chain," and cost each activity in the Process Map (the costs are projections only) to get an understanding of the operating costs for the year, that originate from the supply chain, and make recommendations on how to reduce the highest cost drivers, including the use of technology and a new strategy for dealing with the vendors in the supply chain, to reduce operating costs and increase the gross margin. Review the operating costs data in the income statement for the last 3 years as part of your analysis.

Here is the Chart in reference: