What is a value chain?
A value chain is the set of activities a company performs to design, make, sell, deliver and support what it offers. Michael Porter set it out in his 1985 book Competitive Advantage as a way to find where cost and buyer value are created. Each activity can raise what buyers will pay or lower what it costs to serve them, and the links between activities also matter.
Why it matters to a revenue leader
Sales is one link in the chain, and in services the links after the sale shape the margin. How inspection findings turn into deficiency quotes, and how fast those quotes reach the customer, can decide whether repair revenue follows. A revenue leader who maps the chain can see where revenue leaks between departments. Those handoffs are a natural place for a PE value creation plan to look for early gains.
Example
Fictitious numbersA fire protection company finds 1,200 deficiencies a quarter during inspections. Only 600 become quotes, because technicians' notes reach the sales desk late, and 300 of those quotes are won. Fixing the handoff between field and sales lifts quotes to 1,000 a quarter without adding a seller.
"Where in our chain from inspection to invoice do we lose the most revenue?"
Sources
- Competitive Advantage by Michael E. Porter - Simon & Schuster checked 9 Oct 2026
- The Value Chain - Institute for Strategy and Competitiveness, Harvard Business School checked 9 Oct 2026