Value Chain

Refers to all the stages or steps that occur in the production of a product, from raw material to presentation to the customer. An example of a value chain for woolen clothing might look like this:

• sheep farm>sheared wool> cleaned wool> wool fiber> yarn> cloth> garments> distribution> retailing> customer

In this example, all the participants that add value to the final product are included, from the farms that produce the wool and the factories that produce the cloth, to the retailers who sell the completed clothing.

See also:
backward integration
forward integration
vertical integration

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