Build Your Value-Adding Chain Map

As we discussed in a previous blog post, the value-adding chain is the ecosystem in which your target market segment resides. It describes the relationship between suppliers and customers all the way to the end user. It also documents the critical success factors at every level of the chain.

Building the Value-Adding Chain Map

Let’s look at how to build a value-adding chain map. The first thing you need to do is build a high level map.

Document the Boundaries

The process is the main part of the value chain—the hands through which the product or service passes on the way to the end user. You need to be clear on who all these stakeholders are and how they add value.

Document the outputs, customers, and customer requirements. You need to conduct qualitative and quantitative analysis to determine the benefits these customers truly value. Note who your suppliers are, the inputs they provide, and your requirements for those inputs. These requirements should be measurable.

Document the Flow of Value

Document Activities and Benefits

Draw Relationships

Always start with the consumer and work backwards to raw materials. In the graphic below, the levels in the value-adding chain are depicted with solid line boxes. The vertical integrations are depicted with dotted line boxes. The bold arrows indicate the flow of goods and services. Where the chain branches, show how much goes down each branch. Show where influencers impact decisions.

Analyze the Value-Adding Chain

Start Building Your Value-Adding Chain

Most major industry value chains have been mapped at some level. Start with what you can find, then upgrade and validate. Develop the chain from scratch as a last resort. Different industries and products result in different value chains—the shape of the chain, the structure of the chain, and the key players in the chain.

Quantify both value chain drivers and user market dynamics utilizing analytics such as the Breakthrough Toolkit™.

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