Concept of value chain 

From theoretical aspect, the concept of "valuechain" put forward by Michael porter, to target at enterprise strategy andorganizational development. As per Porter, every enterprise is involving the design,production, sales, delivery and auxiliary procedure to connect with products inthe collection of a variety of activities within the organization. All theseactivities can be integrated into as comprehensive analysis, related to valuechain within the enterprises, and value creation is constituted by a series ofactivities. Furthermore, these activities can be divided into two categories, asbasic activities and auxiliary activities.

                                                      photo from internet

Function ofvalue chain

For instance, basic activities include internal activitieswithin different departments, such as production operation, external logistics,marketing and sales, service, etc. Besides, auxiliary activities are includingprocurement, technology development, human resource management and enterpriseinfrastructure, etc. The profit created by the value chain is out ofintegration function of basic activities and auxiliary activities. In addition,related production and business operation activities are contributing to valuedcreated by value chain, which is to form a dynamic process, for the benefit of enterprises.

Application of value chain

Any kind of activities of enterprises is closely related tothe potential resource of management diversity. Enterprises can create value byachieving competitive advantages through these activities within the enterpriseand with other enterprises. The matters lie in the process of enterprisemanagement by a series of measurement based on different strategies for thecustomers to create value. Other operating differences must be controlled atthe same time to reduce operating costs, so that significant differences can beconverted to profitability.

大意：简单介绍了管理工具中的价值链的定义，内部和外部的机构的连接，价值链的功能，以及价值链如何帮助公司产生价值，创造利润。作为一个企业管理的工具，价值链有着极其重要的作用。