Value Chain Analysis and Competitive Advantage

Abstract

The aim of this article is to provide a more comprehensive way to define and categorize the various kinds of linkages and interrelationships between activities of the value chain. Three methods for the classification of interrelationships are suggested. These are based on the kinds of linkages between activities. To be useful value chain analysis must be a worthwhile method of dividing the firm into activities in order to understand their impact on the business unit. The value chain can be employed to explore the impact that each activity individually can have on cost behavior and differentiation. Implications of strategic linkages and value chain analysis for strategic planning were discussed.