What is the definition of value chains in a business context?

Value chains in a business context refer to the comprehensive set of activities and processes that a company undertakes to deliver a product or service to the market, encompassing every step from the initial sourcing of raw materials to the final sale to the consumer. This includes not only the flow of goods but also the movement of information and payment throughout the entire system.

The definition captures the essence of how various components—such as suppliers, manufacturers, distributors, and retailers—interact to create and deliver value. Each link in the value chain contributes to the overall efficiency and effectiveness of the product or service offered, ultimately affecting customer satisfaction and business profitability.

This multi-faceted perspective distinguishes the chosen definition from the others, which either narrow the scope (focusing solely on suppliers, distribution, or customer input) or miss the integrated nature of the entire process. Value chains emphasize the interconnectedness of these elements, highlighting that successful businesses must manage all aspects of the chain to optimize performance and value delivery.