The value chain analysis is a business tool that enables companies to determine value creation possibilities. The first step the conduct this analysis is to assess and view the firm's operations as a set of value creation activities. The second step is to divide these activities into two categories: primary activities and secondary activities. The primary activities range from product design to after-sales customer service. The secondary activities allow the primary activities to take place. The value chain analysis helps identify cost savings and opportunities to differentiate goods and services.