Identifying ways for creating value

The "Value Chain Analysis" is a useful tool for identifying the ways the firm can create value for their customers, and afterwards to consider how this value can be maximized, whether through products, services or jobs.

It is possible to use the tool in a three-step process, as following:

  1. Activity Analysis: in the first step, the activities undertaken to deliver the product or service are identified, commonly during a brainstorming session. These include the step-by-step business processes that the firm use to provide customers. Then register in a list the activities which add value for the firm. A practical way of doing this is to put them down as a basic flow chart.

    Do the brainstorming with your team, this will ensure more and better quality suggestions.

  2. Value Analysis: in the second step, for each activity, it is recognized what is feasible to do in order to add the greatest value for the customers. For every activity are listed the "Value Factors", meaning what the customer´s value in the way that each activity is performed. Then, write down what should to be done or changed to confer greater value for each Value Factor;
  3. Evaluation and Planning: in the third step, assess whether it is worth making changes, and if so an action plan is launched. Frequently there is a need to establish some priorities as it may be impossible to undertake all the ideas suggested.

    If you have a close relationship with one or more of your customers, it may be important to receive their feedback as regards to the conclusions, either to confirm them or to improve them.

An example of the application of the three-step process is outlined in the next point.