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

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  1. Hi Shay!
    You should be proud of your efforts with this value chain analysis. Out of all of the assessments we have done, I have found this one to be the most challenging. I enjoyed the fact that you were able to comprehensively break everything down. I was not aware that Amazon did not have long-term contracts or arrangements. During one of the analyses we completed (I believe the Porter’s 5 Forces) I thought it would be beneficial to have these sorts of relationships as they could help to cut down on associated costs. On the other hand, I see that no making these commitments will also allow a company to prosper depending on their approach and subsequently the scale of the business (it obviously is not hurting, Bezos!). Moreover, I am quite impressed with Amazon and think they are a tremendous company to model a business after. Their overall customer service experience is exceptional and I can’t say that I’ve had a bad experience with them yet. Nice work 🙂


    1. Tiffany, I absolutely agree with you about Amazon. I see them getting a lot of hate quite often, but I always found the entire operation to be thoroughly impressive. Granted, perhaps I am a bit biased, as I have had many satisfactory experiences ordering through them and dealing with their customer service. Yet, my love for the services they provide aside, I think their success is something all entrepreneurs can benefit from studying.


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