What is Industry Value Chains?

Industry Value Chains

The industry value chains are composed of all the value-creating activities within the industry ending with the completed product delivered to the customer.

The value chain of an industry starts with the raw material manufacturer and finishes with the delivery of the final product to the customer. The key to analyzing the industry value chain is to understand and use the advantage of a company’s comparative strength within the industry.

All industries begin with raw material and end with a sale to a customer. There are many links within this process.T here are upstream links and downstream links. Each separate link stands for an independent, economically feasible segment of the industry.

According to shank and Govindarajan  (1993),” the industry value chain starts with the value-creating processes of suppliers, who provide the basic raw materials and components. It continues with the value-creating processes of different classes of buyers or end-use consumers, and culminates in the disposal and recycling of materials”.

The industry value chain and the value chain activities with the firm are compared as shown below:-

Industry Value Chains
Industry Value Chains

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