What is Value Chain?


The value chain is the process through which a company turns raw materials and other inputs into a finished product.


How Does Value Chain Work?


For example, Company XYZ might take sugar, flour, eggs, baking powder, vanilla and chocolate chips as inputs and add value to these items by mixing them together, applying heat and putting the result in packages. Company XYZ adds more value by delivering the finished product to local grocery stores.


Why Does Value Chain Matter?


The value chain should add value to inputs at every step -- this is how companies build competitive advantage, create profits and ensure that they are creating something that people want to buy. The company's job is to do this for as little cost as possible.

Ask an Expert

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Value Chain.

Be the first to ask a question

If you have a question about Value Chain, then please ask Paul Tracy.

Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

Verified Content You Can Trust
   Certified Experts
   5,000+ Research Pages
   5+ Million Users