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

Which statement about the value chain as a tool for building strategic edge is correct?

Competitive advantage can arise from performing value chain activities more cheaply or in a more differentiated way than rivals. The value chain is an internal analysis; inbound logistics and operations are primary activities, whereas infrastructure and procurement are support activities.

  1. ASupport activities include inbound logistics and operations
  2. BPrimary activities include firm infrastructure and procurement
  3. CCompetitive advantage can arise from performing activities more cheaply or in a more differentiated way than rivalsCorrect
  4. DThe value chain examines only the firm's external environment

Explanation

Porter's value chain analyses the firm's internal activities to find sources of cost or differentiation advantage. Inbound logistics and operations are primary activities, while infrastructure and procurement are support activities, so the first two options reverse them.

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