In search of value-creating activities: an empirical study

The Value Chain (VC) method (Porter, 1985) was introduced approximately 20 years ago, yet even today there is only a limited amount of studies with empirical data. Today, in turbulent and unpredictable business conditions, it is essential for companies to recognise their value-creating activities and drivers for those. This paper examines value creation in view of the activities' effect on the profitability of the company. With the presented method, it is possible to divide the case organisation's most important value-creating activities into two clusters. The first cluster includes activities which have only negative effects on the company's profitability, while the other activity cluster has only positive effects. The drivers for positive or negative value creation (profitability) are discussed together with the practical suggestions at the end of this paper.