A2.4.5 Limitations


One of the problematic areas of the value chain model is that the costs of the different activities of the value chain need to be attributed to an activity. Another relevant area of concern that analysts must pay particular attention to is the customers’ view point of value.

Another point of criticism has been that Porter’s value chain model more suited to manufacturing than service industries. The value chain model describes an industrial organization which essentially buys raw materials and transforms these into physical products.

More recently, it has been criticised for being modelled too closely on the assembly line analogy – being too linear, too unidirectional and too sequential.