What is a value chain?

A value chain refers to a set of activities that a company engages in to deliver a product or service. This concept emphasizes the various steps involved in producing a product or offering a service, with the aim of identifying where value is added throughout the process. Each activity in the value chain contributes to the total value that the final product delivers to customers. By analyzing these activities, businesses can determine areas for improvement, cost reduction, and differentiation, ultimately enhancing their competitive advantage.

In contrast, the other options focus on different aspects of business management. Evaluating employee performance is a process aimed at assessing individual contributions within a company, while financial statement analysis deals with interpreting a company's financial health and performance metrics. Lastly, supply chain management primarily concerns the flow of goods and services, from raw materials to final products, but does not directly encapsulate the broader perspective of value creation inherent in the value chain concept.