The framework of the chain

The value chain was immediately in front of company management thought as a powerful analysis tool for strategic planning. Its ultimate objective is to maximize value creation while minimizing costs. What is at issue is to create customer value, resulting in a margin between what is accepted and pay the costs incurred. The value chain helps to determine the activities or distinctive competencies that can generate a competitive advantage, a concept also introduced by Michael Porter. Having a competitive advantage is to have a higher relative profitability of rivals in the industrial sector in which it competes, which has to be sustainable over time. Profitability means a margin between revenues and costs. Each activity carried out by the company must generate the greatest possible. Otherwise, it should cost as little as possible in order to obtain a margin exceeding that of rivals. Activities of the value chain are multiple and complementary addition (related).The set of activities to choose to value a business unit is what is called competitive strategy and business strategy, different corporate strategies or the strategies of a functional area. The concept of subcontracting, outsourcing or outsourcing, it also analyzes the value chain. The concept has been extended beyond individual organizations. It can also be applied to the study of supply chain and distribution networks. The provision of a set of products and services to consumers mobilize different economic actors, each of which manages its value chain. Synchronized interactions of those local value chains create an extended value chain that can become global. Capturing the value generated along the chain is the new approach adopted by many management strategists.To exploit the information base that goes up and down along the chain, companies can try to overcome the intermediaries creating new business models.