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ACCA Strategic Professional · Strategic Business Leader · The internal resources, capabilities and competences of an organisation

Tarn Components supplies brake parts to a vehicle maker. It finds that the maker's inbound logistics and Tarn's outbound logistics are duplicated, with each holding safety stock. They agree a joint just-in-time delivery system, cutting both firms' costs. Which concept from value chain analysis does this best illustrate?

This illustrates exploiting linkages between the supplier's and customer's value chains within the wider value system. By coordinating deliveries, both firms remove duplicated stock and cost without any ownership change, which rules out integration, diversification or outsourcing.

  1. AExploiting linkages between the value chains of the supplier and customer within the value systemCorrect
  2. BDiversification into an unrelated industry
  3. COutsourcing of a support activity to a third party
  4. DBackward vertical integration through acquisition

Explanation

The value system links the chains of suppliers, firm and customers. Coordinating deliveries to cut duplicated stockholding exploits these external linkages. No acquisition, diversification or outsourcing is described.

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