Leveraging the Value Chain

A value chain is the chain of activities that a company needs to coordinate in order to execute its product or service. Leveraging the value chain refers to maximizing benefits from the value chain in order to execute its function.

Start-ups can leverage the value chain by:

• Outsourcing in the initials stage, when it lacks the resources and capabilities.
• Design products with as many off-the-shelf parts as possible to minimize design and tooling charges.
• Taking on value chain activities if there are no reliable or ready sources or when those activities provide a competitive advantage.
• Enable lean operations to reduce costs by having suppliers do most of the activities.
• Maintain good relations with value chain partners.
• Balance the activities undertaken in-house and outsourced taking into consideration quality and responsiveness of the value chain partners to market fluctuations.