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

Sundaram Foods Ltd analyses its value chain. Its inbound logistics, operations and outbound logistics are efficient, but its after-sales service is poor. Meanwhile the firm's HR practices, procurement of packaging inputs and technology development are strong. Which statement correctly classifies these activities per Porter's value chain?

Procurement, HR management and technology development are support activities, whereas after-sales service is a primary activity. Porter's primary activities cover inbound logistics, operations, outbound logistics, marketing and sales, and service; the rest are support activities.

  1. AProcurement, HR and technology development are support activities; after-sales service is a primary activityCorrect
  2. BAll the named activities except operations are support activities
  3. CHR and after-sales service are primary activities; procurement is a support activity
  4. DTechnology development is a primary activity; inbound logistics is a support activity

Explanation

Porter's primary activities are inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities are procurement, technology development, human resource management and firm infrastructure. Hence after-sales service is primary, while procurement, HR and technology are support. The other options mislabel HR, technology or inbound logistics.

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