Question

What is splitting up the value chain?

Short answer

A value chain is a business model that describes the full range of activities needed to create a product or service.

Step-by-step solution

Step 1. Definition

The chain of adding value to inputs or to the chain of turning imputs into outputs is known as value chain

Step 2. Explanation

When different stages of producing a good take place in different countries around the world it is referred to as splitting up the value chain. Take an example like mobile phone to have various different parts. Splitting up the value chain here means that the firms specialize in producing some particular parts in place of producing all the parts.