Value Chain Analysis — free online maker
Break the business into activities and find where value and cost actually sit. Guided prompts on every block, autosave in your browser, and one-click PDF export.
45-60 minutes to a first draft9 blocks How to fill it in
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What is the Value Chain Analysis?
Value chain analysis breaks a business into the discrete activities it performs, so you can see where value is genuinely created and where cost is genuinely incurred. Porter split them into five primary activities that move a product from input to customer, and four support activities that make the primary ones possible.
It is the most operationally detailed framework here, and the one most likely to change something on Monday. Where a SWOT tells you that costs are too high, a value chain tells you which activity they sit in — and whether that activity is one where you should be competing at all, or one you should be buying from somebody better at it.
Introduced by Michael E. Porter in Competitive Advantage (1985) as the analytical companion to his Five Forces model — Five Forces analyses the industry, the value chain analyses the firm inside it.
Use it when…
- Working out where your cost advantage or disadvantage actually comes from
- Deciding what to outsource and what to keep in-house
- Finding differentiation opportunities in unglamorous activities
- Post-acquisition, to compare two organisations activity by activity
The 9 blocks, in the order to fill them
- 1
Inbound Logistics
How do inputs arrive and get stored?
Receiving, warehousing, and distributing inputs to production — goods inward, inventory control, supplier scheduling, and returns to suppliers. Cost advantage here often comes from inventory discipline rather than purchase price, because holding stock ties up capital that never appears on the unit cost line..
How to fill this block - 2
Operations
How are inputs turned into the finished offer?
Everything that transforms inputs into the product or service — manufacturing, assembly, testing, packaging, or in a service business, the delivery of the work itself. This is usually the largest cost block and the one where scale, quality, and cycle time interact.
How to fill this block - 3
Outbound Logistics
How does the finished offer reach the customer?
Storing finished goods, order processing, scheduling, and delivery. In digital businesses this is distribution, provisioning, and onboarding.
How to fill this block - 4
Marketing & Sales
How do customers learn about and buy from us?
Advertising, promotion, channel selection, pricing, and the sales process itself. Analyse this as an activity with a cost and a yield, not as an overhead: cost per acquired customer by channel is the number that makes this block actionable, and it is frequently the number nobody owns..
How to fill this block - 5
Service
What happens after the sale?
Installation, training, support, repair, upgrades, and parts. Service is the most under-analysed primary activity and often the cheapest place to build differentiation, because competitors treat it purely as a cost to be minimised.
How to fill this block - 6
Firm Infrastructure (Support)
What keeps the organisation running?
General management, finance, planning, legal, quality management, and governance. Rarely a source of differentiation, frequently a source of drag — slow decisions, slow approvals, and slow reporting all show up as delays in primary activities without ever appearing as a cost against them..
How to fill this block - 7
Human Resource Management (Support)
How do we recruit, develop, and keep people?
Recruiting, hiring, training, development, and compensation. In service and knowledge businesses this is not a support activity in any meaningful sense — it determines the quality of the primary activities directly, and turnover in a key role can cost more than any line in operations..
How to fill this block - 8
Technology Development (Support)
How do we improve the product and the process?
R&D, product and process design, automation, and the systems that run the business. Include process technology, not just product technology — automating an internal handoff often returns more than a new feature, and it is systematically under-funded because it has no customer asking for it..
How to fill this block - 9
Procurement (Support)
How do we buy what the business needs?
The purchasing function itself, across every input — raw materials, services, equipment, and software. Porter distinguishes this from inbound logistics deliberately: procurement is the act of sourcing and negotiating, inbound logistics is the physical handling of what arrives.
How to fill this block
Worked Value Chain examples
Complete, realistic canvases with an analysis of what each one reveals. Open one on its own page, or load it straight into the editor above.
Value Chain FAQs
What are the primary and support activities in a value chain?
The five primary activities are inbound logistics, operations, outbound logistics, marketing and sales, and service — they move a product from input to customer. The four support activities are firm infrastructure, human resource management, technology development, and procurement, which make the primary activities possible. Porter set them out in Competitive Advantage (1985).
How do I actually use a value chain analysis?
Go activity by activity and record three things: what it costs, what value the customer perceives from it, and how you compare to competitors. Activities where cost is high and perceived value is low are candidates for outsourcing or elimination. Activities where you are meaningfully better than rivals are your genuine sources of advantage, and they usually deserve more investment than they get.
Does this work for a service or software business?
Yes, with the primary activities reinterpreted. Inbound logistics becomes data and third-party inputs, operations becomes engineering and delivery, outbound logistics becomes provisioning and onboarding, and service becomes support and customer success. The support activities need no translation at all.
What is the difference between the value chain and the Five Forces?
Five Forces looks outward at the industry to ask whether it can be profitable. The value chain looks inward at your firm to ask where your specific costs and advantages sit within it. Porter designed them as a pair, and they are most useful run in that order.