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

Kaveri Foods, a Mysuru packaged-snack firm, has a procurement team that negotiates well with farmers and a food-technology lab that creates new flavours. Neither skill is strong alone, but together they let the firm launch low-cost, distinctive products faster than rivals, and rivals struggle to copy this combination. In strategic analysis terms, this combination is best described as:

The combination is a core competence. It integrates skills from procurement and food technology to give the firm a distinctive, hard-to-copy advantage in cost and product novelty. A threshold capability is only the minimum needed to compete, and a tangible resource is a physical or financial asset.

  1. AA tangible resource
  2. BA threshold capability
  3. CA core competenceCorrect
  4. DA strategic business unit

Explanation

A core competence arises when skills and capabilities from different areas are integrated and give the firm a distinctive edge that is hard to copy. Here, procurement and food technology combine to deliver cost and differentiation together. A threshold capability is only the minimum needed to compete, so it does not give an edge. A tangible resource is a physical or financial asset.

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