The Value Chain describes the sequence of activities through which a product or service progressively gains value, from raw material to the end customer. The model makes visible where in this chain value is created, where costs arise, and where a company can differentiate itself from competitors. The strategic question is: Which parts of the value chain do we master better than others?
Porter distinguishes primary activities (inbound logistics, production, outbound logistics, marketing/sales, service) and support activities (procurement, technology development, human resources, infrastructure). An automotive manufacturer might discover that its strength lies in design and marketing but that manufacturing is not a differentiator, and accordingly outsource more production to partners. Apple has consistently chosen this path: manufacturing lies with Foxconn, while Apple concentrates on design, software, and ecosystem — the parts of the value chain that create the highest value.
The model comes from Michael Porter (1985). Today, the linear value chain is increasingly supplemented by value networks and platform models, where value no longer emerges sequentially but within a network of actors.
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