This lesson teaches how to use value chain thinking to understand where value is created, where costs sit, and where operational or strategic problems may originate.
Value chain analysis is useful in cases involving:
It helps candidates avoid treating the company as a black box.
The value chain breaks a business into the major activities involved in creating and delivering value.
Depending on the company, this may include:
The framework is useful because problems often sit in a specific part of that chain rather than “the company” in general.
Use value chain thinking when you need to understand:
The value chain for manufacturing, retail, and software will look different.
Choose the parts that matter most for the case.
Ask where the issue is most likely to sit.
Do not explain the whole chain if only one or two areas matter.
Prompt:
“A food manufacturer faces margin pressure.”
A useful value chain lens might include:
Then you can ask:
A strong candidate:
A weaker candidate often:
It only helps if it clarifies the problem.
Different business models require different activity maps.
The value chain matters because of cost, service, speed, or differentiation.
You usually do not need the whole chain in equal detail.
Choose one business:
Sketch its major value chain stages and identify where margin pressure would most likely show up.
I would use a value chain lens to identify where the economics are created and where they may be leaking. For this business, I would focus on the stages most likely to drive cost or service outcomes rather than describing every activity equally.
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