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

Bharat Cycles Ltd. has a strong brand and a wide dealer network, but it uses an old plant that causes frequent breakdowns. Management reviews each activity from inbound logistics to after-sales service to see which ones add margin and which ones add only cost. Which strategic tool is it using?

The firm is using value chain analysis. This tool examines each primary and support activity, from inbound logistics to service, to see where the firm creates value or incurs cost. The BCG matrix, PESTLE and Ansoff matrix analyse portfolios, the external environment and growth options instead.

  1. AValue chain analysisCorrect
  2. BBCG growth-share matrix
  3. CPESTLE analysis
  4. DAnsoff matrix

Explanation

Value chain analysis breaks the firm into primary and support activities, such as inbound logistics, operations, outbound logistics, marketing and service, to find where value and cost arise. The BCG matrix classifies business units by market growth and share. PESTLE scans the external environment. The Ansoff matrix deals with product-market growth options.

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