What are the primary activities of Michael Porter s value chain, Investopedia

What are the primary activities of Michael Porter's value chain? The primary activities of Michael Porter's value chain are inbound logistics, operations, outbound logistics, marketing and sales, and service. The primary activities within Michael Porter's value chain are used to provide a company with a competitive advantage in any one of the five activities so it has an advantage in the industry in which it operates. The goal of the five activities are to create value that exceeds the cost of conducting that activity, therefore generating a higher profit. Inbound logistics includes the receiving, warehousing and inventory control of a company's raw materials. Operations include the value-adding activities used to turn a company's raw materials into a final product. Outbound logistics are the activities needed to get a company's finished product to its customer for sale. Marketing and sales are the activities needed to get a buyer to purchase a product, and include channel selection, advertising and pricing. Finally, service activities are those that increase a product's value, including customer support and repair services. For a company to take advantage of the primary activities of Michael Porter's value chain, it first must start with a generic value chain and identify the company-specific activities that fall within the generic value chain. Once the company-specific activities are defined, a company must find patterns and links between activities. A link exists if the value of one activity increases the value of a second activity. A company can then gain a true competitive advantage by coordinating and optimizing linked activities. (For related reading, see: The Basics of Value Chain Analysis .)