Analysis of the 'added value' achieved by an organisation will reveal how much has been contributed by each of its primary and support activities of porter's value chain.

The objective of the analysis is to identify those activities undertaken by the organisation which contribute the most to the total value added. This is so that strategies may be established to increase their contribution still further in order to meet organisational objectives.

Task:

• Explain how value chain analysis may help a company:
  • To assess the value added by each of its primary and support activities
  • To determine its priorities for strategic resource allocation