CMA Final · Entrepreneurship and Startup · Value Addition

A Pune agri-startup stops selling raw turmeric to traders and instead sells packaged, certified, branded turmeric powder directly to consumers online. In value-chain terms, the main reason this move raises its margin is that it:

The margin rises because the startup now performs processing, packaging, certification and branding itself and sells directly to consumers, thereby capturing value and intermediary margins that traders earlier kept. It is a forward move along the value chain, not a reduction in competition or output.

1. Acaptures activities earlier performed by intermediaries and adds processing and brand valueCorrect
2. Breduces the quantity of turmeric the farmers grow
3. Cavoids all competition because the product is a commodity
4. Dconverts variable costs into sunk costs automatically