What does the concept of "value chain" refer to?

The concept of "value chain" refers to the activities that bring a product from conception to delivery. It encompasses all the processes that a company undertakes to create value for its customers, including design, production, marketing, distribution, and after-sales service. Each step in the value chain contributes to the overall efficiency and effectiveness of bringing a product to market, therefore affecting the company's competitive advantage and profitability.

Understanding the value chain is essential for businesses as it helps identify areas for improvement, cost reduction, and optimization of operations. When a company examines its value chain, it can determine which activities are critical to delivering value to customers and how to enhance those activities to meet customer needs better.