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

Kaveri Foods earned a good return by leveraging its cold-chain network and farmer relationships. A consultant says that when two or more of its activities are carried out together, the combined result exceeds the sum of what each could deliver separately, and that rivals find this hard to copy because it arises from how activities fit one another. A Kaveri director argues that this is simply a core competence of one function. Which statement most accurately corrects the director?

The best correction is that the advantage reflects fit and synergy among linked activities across the value chain, not one function's skill. Because the benefit arises from how activities reinforce each other, it exceeds the sum of parts and is hard to copy. It is neither a mere threshold resource nor a generic strategy.

1. AIt is a core competence because it belongs to one department, so no correction is needed
2. BIt reflects activity-system fit or synergy across the value chain, which comes from linkages rather than a single function's skillCorrect
3. CIt is a threshold resource, since any firm in the industry needs a cold chain
4. DIt is a cost leadership strategy, since it lowers the cost of every activity