Porter's Value Chain is a system of concrete activities, not an organisation chart. Advantage may arise from one activity or coordination across activities.

1. 1

   Set boundary

   Set boundary

   

   Goal

   Produce analysis boundary so the core question “Which activities and linkages drive cost or differentiation, and where is change worthwhile?” can be answered with stronger support.

   Inputs for this step

   • Defined offer and segment
   • Activity and cost data
   • Customer value and process knowledge

   Actions

   • Set offer, segment, geography, and horizon.
   • Record source, rationale, and open uncertainty directly in analysis boundary.

   Output

   analysis boundary

   analysis boundary · source · uncertainty · next decision

   Quality check

   Is it clear whose value and margin are analysed?

   Pitfall

   Departments replace activities or local cost optimisation displaces customer value. Return to activities, inputs, outputs, and linkages and assess cost and differentiation together.

   Timing: 10–20 minutes

2. 2

   Map activities

   Map activities

   

   Goal

   Produce activity chain so the core question “Which activities and linkages drive cost or differentiation, and where is change worthwhile?” can be answered with stronger support.

   Inputs for this step

   • analysis boundary
   • Activity and cost data
   • Customer value and process knowledge

   Actions

   • Map primary and support activities as concrete work.
   • Record source, rationale, and open uncertainty directly in activity chain.

   Output

   activity chain

   activity chain · source · uncertainty · next decision

   Quality check

   Are activities described rather than departments?

   Pitfall

   Departments replace activities or local cost optimisation displaces customer value. Return to activities, inputs, outputs, and linkages and assess cost and differentiation together.

   Timing: 10–20 minutes

3. 3

   Analyse drivers

   Analyse drivers

   

   Goal

   Produce driver analysis so the core question “Which activities and linkages drive cost or differentiation, and where is change worthwhile?” can be answered with stronger support.

   Inputs for this step

   • activity chain
   • Activity and cost data
   • Customer value and process knowledge

   Actions

   • Support cost, differentiation, and linkage drivers with data.
   • Record source, rationale, and open uncertainty directly in driver analysis.

   Output

   driver analysis

   driver analysis · source · uncertainty · next decision

   Quality check

   Is the path from driver to cost or value visible?

   Pitfall

   Departments replace activities or local cost optimisation displaces customer value. Return to activities, inputs, outputs, and linkages and assess cost and differentiation together.

   Timing: 10–20 minutes

4. 4

   Choose options

   Choose options

   

   Goal

   Produce intervention portfolio so the core question “Which activities and linkages drive cost or differentiation, and where is change worthwhile?” can be answered with stronger support.

   Inputs for this step

   • driver analysis
   • Activity and cost data
   • Customer value and process knowledge

   Actions

   • Prioritise improvement and make-or-buy options with trade-offs.
   • Record source, rationale, and open uncertainty directly in intervention portfolio.

   Output

   intervention portfolio

   intervention portfolio · source · uncertainty · next decision

   Quality check

   Does the option improve system margin or differentiation?

   Pitfall

   Departments replace activities or local cost optimisation displaces customer value. Return to activities, inputs, outputs, and linkages and assess cost and differentiation together.

   Timing: 10–20 minutes