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ACCA Applied Knowledge · Business and Technology · Competitive factors

Which of the following is a reason why Porter's value chain looks beyond a single organisation to a value system?

The value system exists because an organisation's activities connect with those of suppliers, distributors and customers, who each add value to the final product. Competitive advantage can therefore depend on managing these external links. It is not because support activities must be external or because the model applies only internationally.

  1. AThe firm's activities link with those of suppliers, distributors and customers, who also add valueCorrect
  2. BSupport activities cannot be performed inside the organisation
  3. CThe model only applies to firms operating internationally

Explanation

The value system includes the value chains of suppliers, channels and buyers, because the firm's competitive position depends on how well it links with them. Support activities can be performed internally, and the model is not limited to international firms.

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