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Porter’s value chain – understanding how value is created within organisations

How do you change business inputs into business outputs in such a way that they have a greater value than the original cost of creating those outputs?

How does your organisation create value? How do you change business inputs into business outputs in such a way that they have a greater value than the original cost of creating those outputs? This isn’t just a dry question. It is a matter of fundamental importance to companies because it addresses the economic logic of why the organisation exists in the first place.

Manufacturing companies create value by acquiring raw materials and using them to produce something useful. Retailers bring together a range of products and present them in a way that’s convenient to customers, sometimes supported by services such as fitting rooms or personal shopper advice. And insurance companies offer policies to customers that are underwritten by large or reinsurance policies.

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