value-added chain

Value-added statementclick for a larger image
Fig. 85 Value-added statement. Value-added statement of Y Co for year ending 31 December 20xx.
Value-added chainclick for a larger image
Fig. 84 Value-added chain.

value-added chain

a chain of vertically linked activities which each add value (see VALUE ADDED) in producing and distributing a product. Depending on the nature of the product the value-added chain may involve a large number of vertically linked activities or only a few. Fig 84 overleaf, for example, shows one particular value-added chain in the petrochemical industry. Here the value-added chain involves converting a raw material (oil) into intermediate materials (ethylene and PVC), then into a finished product (plastic kitchenware), then packaging and physically distributing this kitchenware to consumers.

Strategically, where a firm ‘positions’ itself in the value-added chain for an industry can have an important bearing on its profitability since different activities within the chain may (because of technical and competitive considerations) generate different levels of profitability. For example, supplying unprocessed basic raw materials may yield low levels of profit compared to more skill-intensive later stage processing activities or the supply of high-technology ‘speciality’ inputs.

In many cases, firms will choose to embrace a number of ‘stages’ in the value-added chain as part of a vertically integrated operation in order to reduce costs or secure ‘tied’ input supplies or market outlets. See VALUE CREATED MODEL, VALUE CHAIN ANALYSIS, VERTICAL INTEGRATION.

Value-added chainclick for a larger image
Fig. 192 Value-added chain.

value-added chain

a chain of vertically linked activities that each adds value (see VALUE ADDED) in producing and distributing a product. Depending on the nature of the product, the value-added chain may involve a large number of vertically linked activities or only a few. Fig. 192, for example, shows one particular value-added chain in the petrochemical industry Here, the value-added chain involves converting a raw material (oil) into intermediate materials (ethylene and PVC), then into a finished product (plastic kitchenware), then packaging and physically distributing this kitchenware to consumers.

Strategically, where a firm ‘positions’ itself in the value-added chain for an industry can have an important bearing on its profitability since different activities within the chain may (because of technical and competitive considerations) generate different levels of profitability For example, supplying unprocessed basic raw materials may yield low levels of profit compared to more skill-intensive later-stage processing activities or the supply of high-technology ‘speciality’ inputs.

In many cases, firms will choose to embrace a number of‘stages’ in the value-added chain as part of a vertically integrated operation in order to reduce costs or secure ‘tied’ input supplies or market outlets. See VERTICAL INTEGRATION, VALUE-ADDED TAX.

References in periodicals archive ?
The flexible and scalable ERP system features a wide range of functions that allow all processes along the value-added chain to be controlled.
'The Chinese government has subsequently embarked on a series of reforms that are designed to push the economy further up the value-added chain over the past years.
Our less reliance on the more value-added segment did not only keep us from earning big bucks but we also lose opportunities when it comes to job creation, which is more tied to further downstream of the value-added chain.
The Ministry of National Food Security secretary shared with the meeting a report on value-added chain of sugar.
This world leading annual e-trade fair provides a unique spectrum of offers dealing with the entire glass value-added chain.
Macedonia has gained market share in its main export market (the EU) and moved up the value-added chain evident in the rising share of exports of machinery and transport equipment and chemical products.
For value-added chain industry, the sales tax rate should be 0.5pc at each stage of value addition.
With a value-added chain that extends from pre-clinical and clinical development to worldwide sales, Biotest has specialized primarily in the areas of clinical immunology, haematology and intensive medicine.
And last but not least, I'd like to thank all our partners in the value-added chain they've helped us by explaining the benefits of our development," said Jan Doldersum, Manager Marketing and Business Development at Rijk Zwaan Distribution B.V.
Duran Group is a global manufacturer of borosilicate glass and container solutions for the laboratory and industrial glass markets and possesses the entire value-added chain from the melting process to precision forming and working processes.
The new corporate design perfectly underlined the guiding idea of the exhibition to provide for more sustainability in the production processes of the textile value-added chain. The great number of visitors and the quality of the discussions exceeded the expectations.