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CA Intermediate · Financial Management and Strategic Management · Strategic Analysis: Internal Environment

Ananya Foods, an Indian packaged snacks company, studies how raw material procurement, production, outbound distribution, marketing and after-sales service each add margin, and separately examines HR management, technology development and firm infrastructure. Which tool is it using, and how does it classify HR management?

The company is using Porter's value chain analysis, and HR management is a support activity. Primary activities cover inbound logistics, operations, outbound logistics, marketing and sales, and service, while support activities such as HR, technology, procurement and infrastructure assist all the primary ones.

  1. AValue chain analysis; HR management is a support activityCorrect
  2. BValue chain analysis; HR management is a primary activity
  3. CBCG matrix; HR management is a star activity
  4. DVRIO analysis; HR management is a rare resource

Explanation

Porter's value chain splits activities into primary (inbound logistics, operations, outbound logistics, marketing and sales, service) and support (procurement, technology development, human resource management, firm infrastructure). HR management is a support activity that cuts across all primary activities. Calling it primary is the common error.

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