CS Professional · Strategic Management and Corporate Finance · Competitive Positioning
Sundaram Foods, an Indian packaged snacks firm, installs a company-wide ERP system that serves purchasing, production, distribution and sales. In value chain terms, this investment mainly belongs to which category?
The ERP investment is a support activity, specifically technology development. Because the system serves purchasing, production, distribution and sales together, it cuts across the whole value chain rather than belonging to any single primary activity such as operations.
- AInbound logistics, a primary activity
- BTechnology development, a support activityCorrect
- COperations, a primary activity
- DService, a primary activity
Explanation
A company-wide ERP system supports all primary activities rather than a single one. Systems and technology that assist the whole chain fall under the support activity of technology development. Labelling it as operations ignores that it serves every stage.
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