CA Intermediate · Financial Management and Strategic Management · Strategic Analysis: Internal Environment
Bharat Cycles has long handled procurement, assembly, distribution and after-sales service. Its management now wants to study each activity separately to see where cost is incurred and value is added, and to find the margin left after all activity costs. Which framework suits this purpose, and which of the following is a support activity in it?
Value chain analysis fits, and human resource management is the support activity. The framework splits a firm into activities to see cost and value creation. Outbound logistics and marketing and sales are primary activities, while HR management, procurement, technology development and infrastructure support them.
- AValue chain analysis; outbound logistics
- BValue chain analysis; human resource managementCorrect
- CBCG matrix; procurement
- DValue chain analysis; marketing and sales
Explanation
Examining activities one by one for cost and value is value chain analysis. Porter's primary activities are inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities are procurement, technology development, human resource management and firm infrastructure. Thus human resource management is the support activity; outbound logistics and marketing and sales are primary.
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