A value chain is a combination of the systems a company or organization uses to make money. That is, a value chain is made up of various subsystems that are used to create products or services. This includes the process from start to finish.
Given the importance of the value chain, Michael Porter developed a strategic management tool for analyzing a company’s value chain. Porter breaks value chain analysis into five primary activities. Then, he further breaks those down into four activities that help support primary activities. Below, I have performed Porter’s analysis for Amazon. This will help gain a better understanding of how the factors relate to smaller e-commerce businesses, such as my intended venture.
Michele, BillT, Mind Tools Content Team, Mind Tools Content Team, & Mind Tools Content Team. (n.d.). Porter’s Five Forces: – Understanding Competitive Forces to Maximize Profitability. Retrieved from https://www.mindtools.com/pages/article/newTMC_08.htm