Value Chain

A value chain in Wardley Mapping is the chain of dependencies that delivers value to a user.

It starts with the user’s need, then traces what’s required to meet that need, step by step, down to the unseen utilities like compute or power. Unlike Porter’s value chain (focused on activities), this is a map of dependencies — from visible features to invisible infrastructure. By making the chain explicit, leaders can ask: where are we investing effort, and does it make sense?

What is a Value Chain?

A value chain shows how your business creates value for customers. It maps the what is needed to deliver a solution that meets that need. Each node in the chain adds value and contributes to the final customer experience.

Mini-example

Imagine you want tea, you can represent it in the following way:

Naturally, this is not very helpful for any analysis. But you can think now what you need to make your tea.

By expanding the graph, you learn more about what is needed, and sooner or later you will have to do additional research (which is the point).

Creating a value chain is in fact a rigorous research process that takes into the account physical components, practices, data and others. A.k.a. everything that matters.

Key Components of a Value Chain

1. User

The person or organization with the need - your target customer. This is often generalized to general 'Stakeholder', as any organization needs to balance needs of different stakeholders (f.e. customers want value, shareholders want profit).

2. User Needs

What your customer wants to achieve or the problem they need to solve. Very

3. First line capabilities

How you reach and interact with users - your touchpoints and communication methods.

4. Less visible capabilities

Capabilities that you need necessary to satisfy your customer needs. They might be yours or your vendors.

Why Value Chains Matter in Strategy

A value chain forces you to see reality.

• Anchor on user need – The user is the only true north. When you ask does this serve the user?, most internal conflicts dissolve.
• Avoid wasteful optimization – Too many organizations polish the wrong parts. Why optimize what barely touches the outcome?
• See hidden dependencies – What looks simple often sits on layers of invisible complexity. Mapping makes the invisible visible.
• Guide smart investments – Strategy is not about spreading bets. It’s about putting weight where it changes the game.

Value Chain vs. Supply Chain

While related, value chains and supply chains are different:

• Value Chain: Focuses on value creation for customers
• Supply Chain: Focuses on the flow of materials and products

A value chain includes customer-facing activities that supply chains typically don't cover.

Porter Value Chain vs. Wardley Value Chain

Though they share a name, they’re not the same:

• Porter Value Chain: A model of business activities (e.g. inbound logistics, operations, marketing) that describes how a firm creates value.
• Wardley Value Chain: A map of dependencies from user needs down to underlying components (e.g. power, compute, pipes).

Porter’s chain is about activities inside the firm. Wardley’s chain is about what’s needed to serve the user.

Mapping Your Value Chain

To map your value chain:

1. Start with the user need - What problem are you solving?
2. Work backwards - Identify each step needed to deliver value
3. Include all activities - Don't skip steps, even if they seem obvious
4. Be specific - Use clear, concrete language
5. Consider alternatives - Think about different ways to deliver value

Key Takeaways

• Value chains show how you create customer value - Map the complete journey from need to solution
• Every business has a value chain - Whether you're selling products, services, or experiences
• Value chains guide strategic decisions - Use them to identify opportunities and threats
• Value chains evolve over time - Update your understanding as your business and market change
• Value chains reveal competitive dynamics - Compare yours to competitors to find advantages

Understanding your value chain is the first step in Wardley Mapping. It provides the foundation for analyzing evolution, identifying strategic opportunities, and making better decisions about where to invest and compete.