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CS Professional · Strategic Management and Corporate Finance · Managing the Multi-Business Firm and Analyzing Strategic Edge

Which statement about linkages in a value chain is correct?

Linkages are relationships in which the way one value activity is performed affects the cost or effectiveness of another. Managing and optimising these interdependencies, inside the firm and with suppliers or channels, can create competitive advantage under any generic strategy.

  1. ALinkages exist only between primary activities and never with support activities
  2. BLinkages are relationships where the way one activity is performed affects the cost or effectiveness of another, offering scope for optimisationCorrect
  3. CLinkages refer only to supplier contracts outside the firm
  4. DLinkages are removed when a firm adopts a differentiation strategy

Explanation

Linkages are interdependencies among activities, within the firm or with suppliers and channels. For example, higher quality inbound material can cut operations rework. Coordinating or optimising linkages can yield competitive advantage, and they exist under any generic strategy.

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