The second point what is the value chain

2、Analysis of the value chain

Each industry, can be split into upstream, midstream and downstream, which is the result of the great division of labor in society.

Upstream research and development, midstream manufacturing and distribution, downstream branding and marketing, constitute a complete industrial chain.

Each company is in one or more of these links.

What we need to dig deeper is the value chain.

What is the value chain? The value chain is the distribution of benefits in the industry chain.

To put it bluntly, who makes all the money in the industry? Who has more bargaining power? And who is doing the hard work?

We often say that the industry smile curve is about the value chain. The two ends of the research and development and marketing, earn the most profit.

Why Apple is so powerful is because it has a firm grasp of both ends of the R&D and branding.

According to the analysis of Jason Dedrick's team at the Center for Information Technology and Organizational Studies at the University of California, Irvine in 2012, Apple was able to earn $75 in the profit of 100 iphones.

Understand the value chain, you read the vertical pattern of the industry.‌$苹果(AAPL)$  ‌‌$标普500ETF(SPY)$  ‌‌$标普500(.SPX)$  ‌‌$特斯拉(TSLA)$  ‌‌$纳指三倍做空ETF(SQQQ)$  ‌‌$亚马逊(AMZN)$  ‌‌$微软(MSFT)$  ‌‌$阿里巴巴(BABA)$  ‌‌$谷歌(GOOG)$  ‌