The value chain

Why?

The Value Chain is a tool developed by the economist Michael E. Porter (1985) who identified nine central activities that create value and cost for a company. The students use this method to evaluate and discuss the present situation of the company linked to the problem. This activity might reveal potential problems and hence form the basis for a problem statement.

How?

Ask the students to draw the value chain on a big piece of paper or on a black board. Now, ask the students to fill out all nine strategic activities of this model. The students must supplement the descriptions of each activity with a drawing as to facilitate a visual understanding of potential problems in the value chain of the company. Based on this model, the students write down a problem statement.

Tips

Involving the company and its customers will increase an understanding of each activity and the target group for the value creation of these activities. This will in turn increase the quality of the problem statement.

Literature

Porter, Michael E. (1985) Competitive strategy. In de Witt & Meyer (1998) Strategy: Process, content, context. Thompson: 344-358.