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

Kaveri Textiles studies its activities from inbound logistics through operations, outbound logistics, marketing and sales, and service. It also reviews procurement, technology development, HR management and firm infrastructure. Which tool is the firm applying, and what is it primarily used to identify?

The firm is using Porter's value chain analysis. It examines primary and support activities to find where value is created and where cost or differentiation advantage arises. The BCG matrix, SWOT and five forces use different inputs and serve different purposes.

  1. AValue chain analysis, to find activities that create value and marginCorrect
  2. BBCG matrix, to classify products by market share and growth
  3. CSWOT analysis, to match internal strengths with external threats
  4. DPorter's five forces, to judge industry attractiveness

Explanation

The primary activities (inbound logistics, operations, outbound logistics, marketing and sales, service) and the support activities (procurement, technology development, HR management, firm infrastructure) are the components of Porter's value chain. It is used to find where value and cost advantages arise. The other tools use different elements.

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