Porter's value chain - part 1

In this lesson

1. 0:00 Porter's value chain overview
2. 1:05 Primary activities explained
3. 3:18 Support activities breakdown
4. 4:31 Value chain analysis applications
5. 5:51 Model limitations and drawbacks
6. 6:45 Spotify case study example

About this lesson

This first part explores the five primary activities—inbound logistics, operations, outbound logistics, marketing and sales, and after-sales service—and the four support activities that enable them, showing how they link together to drive strategy. You'll see why this model matters for cost leadership or differentiation strategies, how to apply it in practice, and its limitations in today's digital world. By the end, you'll understand how to analyse where your organisation genuinely creates value and where to focus your efforts for maximum impact. The value chain is a foundational strategic analysis tool used across CIMA and ACCA qualifications, particularly in papers covering strategic management and competitive positioning. Porter designed it for manufacturing organisations, so the model works best when you're analysing how raw materials flow through operations and reach customers. However, it remains flexible and relevant for service businesses too—as the Spotify example demonstrates—because it forces you to think critically about which activities truly generate value and which are simply cost centres. Understanding the linkages between primary and support activities is key: technology might support operations, while human resources management underpins after-sales service. These connections reveal how your generic strategy—whether you're competing on cost or differentiation—should shape every element of your value chain to protect your margin and competitive position.

Duration: 9m