The concept of "value chain" was proposed by Michael Porter in "Competitive Advantage" published in 1985. Porter believes that the value creation of an enterprise is composed of a series of activities, which can be divided into basic activities and supportive activities. The basic activities cover production, sales, feed logistics, etc., and supportive activities include personnel, finance, etc. These interrelated activities constitute a dynamic process of creating value, namely the value chain. Value activities are part of competitive advantages. The combination of their economic effects determines the company's cost competitiveness and the degree of satisfaction of buyer needs. Comparing with competitor value chains can reveal the differences in competitive advantages.

1. The company's activities are closely related, such as the mutual influence of raw material supply and production and manufacturing.

2. Each activity can bring tangible or intangible value to the company, such as high-quality services that can enhance the company's reputation.

3. The value chain not only includes internal activities of the enterprise, but also external activities between the enterprise and suppliers and customers. Value chains are widely present in economic activities. Value chain links exist between upstream and downstream enterprises and between business units within enterprises, and each link will affect the final value of the enterprise.

This model is used to analyze the competitive situation of enterprises. The competitive advantage of enterprises is ultimately cost-leading and innovative. Decomposing corporate activities and examining their relationships will help companies recognize their own advantages and disadvantages in the value chain, thereby adjusting their structure and creating new competitive advantages.

2.1.1 Five types of basic activities

2.1.2 Four basic types of supportive activities

Value activities are divided into basic activities and supportive activities.

Value chains are systems composed of interdependent activities, and links bring competitive advantages through optimization and coordination, reflecting trade-offs and coordination needs among activities. The large number of connections, including the connection between auxiliary activities and basic activities, is crucial to competitive advantages, but is often elusive. Recognizing and managing these contacts requires the support of information systems and is difficult to manage. The ability to effectively manage contacts can become a source of competitive advantages.

Links exist between the value chain of the enterprise and the supplier and the channel, that is, vertical links. The activities of suppliers and channels can affect the cost or benefits of business activities and vice versa. Coordinating and optimizing connections with suppliers and sales channels can enhance competitive advantages, but due to factors such as the independence of suppliers and sales channels, there are certain difficulties in using vertical connections, and modern information systems provide them with new possibilities.

The scenery frames that affect the value chain include subdivided scenery frames, vertical scenery frames, geographical scenery frames and industrial scenery frames. A broad landscape frame can take advantage of the interrelationship between internal activities and value chains, but it incurs costs; a narrow landscape frame can optimize the value chain for specific goals. Different landscape frames are related to competitors.