
What Is a Value Chain, and Why Does It Matter in Sales?
Discover how creating value for your customers at every stage of the sales process is your key to success.
By Naveen Gabrani , Founder and CEO, Astrea IT Services
October 3, 2025
Discover how creating value for your customers at every stage of the sales process is your key to success.
By Naveen Gabrani , Founder and CEO, Astrea IT Services
October 3, 2025
Your product spends a lot of time traveling through your company. As it moves from basic materials to distribution, it's part of multiple activities that mold it into what is eventually sold to your customers.
Are these activities enhancing your product's value for your customers?
That's where the value chain comes in. It helps identify and analyze ways you can add value to the sequence of activities before your product ends up in a customer's hands.
A value chain is the series of business activities a company performs to create a product or service from start to finish. The idea of a value chain was introduced by Michael Porter in his 1985 book, Competitive Advantage: Creating and Sustaining Superior Performance.
The value chain identifies each activity where value is added — such as sourcing, manufacturing, and sales — and examines how these activities interact. By defining these activities, a company can analyze and optimize them in terms of cost and quality to improve its competitive advantage.
A business carries out a series of activities, such as business functions or support processes, to create a product or deliver a service. A value chain breaks down these activities and examines each one individually, as well as how they interconnect. The goal is to determine if each activity adds value to the product or service. By analyzing the value chain, businesses can identify areas of inefficiency that hinder the delivery of a quality product and take steps to improve them as needed.
A supply chain is a network of individuals and companies involved in the creation, production, and distribution of a product or service. The chain may involve suppliers, manufacturers, warehouses, transportation companies, and retailers. A value chain looks at the series of activities within the supply chain to find ways to enhance the product's value for the customer.
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A value chain provides a company with several advantages to optimize performance and streamline operations. Identifying cost and quality inefficiencies within a value chain can lead to increased revenue and profits for the business.
Other benefits of using a value chain include the ability to:
A value chain framework consists of five primary activities and four supporting activities that a company's product goes through. Each activity seeks to increase profit margins by adding value for customers.
Primary activities add value by helping build and sell a company's products or services:
Secondary activities support the primary activities:
A value chain analysis is a strategic method used to assess each primary and secondary activity in the chain. It determines how each activity in a company contributes to the value of its product or service.
Follow these three steps to run a value chain analysis:
A good place to start your analysis is by using the analytics in your Salesforce automation software. The tool provides insights into customer data and sales team performance, which are crucial to understanding your value chain. For example, if you see that product demos lead to more closed deals, then you might consider optimizing that sales area for greater value.
Here's how a company can add value to its product or service through the primary activities in a consumer goods value chain, using Top Tech Company's laptop as an example.
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A value chain helps identify activities that increase your profits after subtracting the cost of performing those activities. You can eliminate weaker activities that don't generate value and optimize stronger ones that do.
Some business benefits of value chains include:
The rise of globalization has significantly influenced value chains as an increasing number of goods, services, and people extend across borders. The internal activities in the value chain are being moved externally, such as with the outsourcing of production to another country or hiring a nearshore customer service center. By expanding their operations internationally, companies find cost efficiencies with value chain activities.
Emerging technologies like agentic AI and sales automation are also driving the growth of value chains. Nine in 10 small and medium businesses with AI experience more efficient operations, according to the Salesforce Small & Medium Business Trends Report . They report AI has greatly improved productivity (49%), customer experience (48%), and revenue (46%).
By using AI for sales, marketing, and service activities, businesses can identify connections among them within the value chain. A sales engagement platform allows teams to share customer data and engage with customers across channels. Tools like Agentforce can enhance the customer experience by using AI sales agents to address customer issues or draft marketing emails.
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A value chain plays a pivotal role in creating value for a company's customers. By analyzing each activity of the chain, you'll capitalize on opportunities to stand out from the competition, reduce costs, and boost profits. You'll drive more value to your customers, resulting in stronger relationships and higher satisfaction.
A robust value chain eliminates activities that don't add value and improves those that do. It can enhance business efficiency, competitive edge, and a product's value for customers.
A value chain framework comprises five primary activities and four supporting activities. Primary activities create value by helping build and sell a company's products or services and include inbound logistics, operations, outbound logistics, marketing and sales, and service. Secondary activities support the primary ones and include procurement, technology development, human resource management, and firm infrastructure.
Agentic AI is being used for sales, marketing, and service activities to detect linkages between them in the value chain. A tool like Agentforce, an AI sales agent software, can improve the customer experience by deploying AI sales agents to handle customer issues via chatbots or draft marketing emails for customers.
Data analytics can be part of a value chain analysis, a strategic approach that evaluates the efficiency of each primary and secondary activity within the chain. It determines how each activity in a company adds to the value of its product or service. Sales analytics software can offer insights into customer data and sales team performance.
The rise of globalization has impacted value chains as more goods, services, and people extend across borders, such as through outsourcing production to another country or hiring a nearshore customer service center. Changes in the global value chain can cause challenges related to geopolitical instability, regulations and compliance, and disruptions in labor and materials.
A value chain analysis is a strategic method used to evaluate the success of each primary and secondary activity within the value chain. The process involves creating a value chain diagram to map out the activities, analyzing each sub-activity to determine cost and value, and examining the linkages to understand how the activities interconnect.