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Chapter 2. The Commerce Value Chain > Introducing the Commerce Value Chain

Introducing the Commerce Value Chain

When a consumer buys a manufactured item in a store, it is merely one step in a complex process that began with the raw materials used in creating the item. At each step in that process, something of value was added. That value might have been refining the raw materials, molding them into a useful shape, transporting them for further processing, or selling the item to the final consumer. We sometimes refer to this as the value chain for a product—the chain of adding value in creating and delivering a product.

Even though this idea of a value chain is most clearly exemplified by a manufactured product, we can use it to describe many kinds of business activities, including more focused components of the very broad chain just described. For example, we can look at the value chain of a retail store, which includes selecting products that will be sold, purchasing them from a wholesaler or manufacturer, arranging attractive displays, advertising to attract customers, assisting customers with their selections, taking payments for the products, and delivering the products to customers. Each of these links in the chain is important to the business, and if any one of them breaks down, the entire business is affected.


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