Porter’s value chain involves five primary activities: inbound

logistics, operations, outbound logistics, marketing and sales, and

service. Support activities are illustrated in a vertical column over
all of the primary activities. These are procurement, human
resources, technology development, and firm infrastructure.

Inbound Logistics

Inbound logistics include the receiving, warehousing

and inventory control of a company's raw materials.
This also covers all relationships with suppliers. For
example, for an e-commerce company, inbound
logistics would be the receiving and storing products
from a manufacturer that it plans to sell.
Operations

Operations include procedures for converting raw

materials into a finished product or service. This
includes changing all inputs to ready them as outputs.
In the above e-commerce example, this would include
adding labels or branding or packaging several
products as a bundle to add value to the product.
Outbound Logistics

All activities to distribute a final product to a consumer

are considered outbound logistics. This includes
delivery of the product but also includes storage and
distribution systems and can be external or internal.
For the e-commerce company above, this includes
storing products for shipping and the actual shipping of
said products.
Marketing and Sales

Strategies to enhance visibility and target appropriate

customers—such as advertising, promotion, and
pricing—are included in marketing and sales.
Basically, this is all activities that help convince a
consumer to purchase a company’s product or service.
Continuing with the above example, an e-commerce
company may run ads on Instagram or build an email
list for email marketing.
Services

This includes activities to maintain products and

enhance consumer experience—customer service,
maintenance, repair, refund, and exchange. For an e-
commerce company, this could include repairs or
replacements, or warranty.
Porter's Value Chain Secondary Activities
Procurement

Procurement is the acquisition of inputs, or resources,

for the firm. This is how a company obtains raw
materials, thus, it includes finding and negotiating
prices with suppliers and vendors. This relates heavily
to the inbound logistics primary activity, where an e-
commerce company would look to procure materials or
goods for resale.
Human Resource Management

Hiring and retaining employees who will fulfill

business strategy, as well as help design, market, and
sell the product. Overall, managing employees is useful
for all primary activities, where employees and
effective hiring are needed for marketing, logistics, and
operations, among others.
Infrastructure

Infrastructure covers a company's support

systems and the functions that allow it to maintain
operations. This includes all accounting, legal,
and administrative functions. A solid infrastructure
is necessary for all primary functions.
Technological Development

Technological development is used during

research and development and can include
designing and developing manufacturing
techniques and automating processes. This
includes equipment, hardware, software,
procedures, and technical knowledge. Overall, a
business working to reduce technology costs,
such as shifting from a hardware storage system
to the cloud, is technological development.