virðiskeðju

Virðiskeðja, often translated as value chain, refers to the full range of activities required to bring a product or service from conception to delivery to the customer. It encompasses all the steps involved in creating and delivering a product or service, including design, production, marketing, distribution, and customer support.

The concept of the value chain was popularized by Michael Porter in his 1985 book Competitive Advantage: Creating and Sustaining Superior Performance. Porter's model breaks down a company's activities into primary and support activities. Primary activities are directly involved in the creation, sale, and delivery of a product or service, such as inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities, on the other hand, enable the primary activities to take place and include firm infrastructure, human resource management, technology development, and procurement.

By analyzing its value chain, a company can identify areas where it can gain a competitive advantage. This might involve improving efficiency in certain activities, differentiating its offerings, or reducing costs. Understanding the value chain helps businesses to optimize their processes, allocate resources effectively, and ultimately enhance profitability and customer satisfaction. It is a crucial tool for strategic analysis and decision-making in business management.