Value chain analysis is a tool used to
A) analyze a firm's external environment for value-creating opportunities.
B) analyze a firm's primary and support activity in isolation from influences of the external environment.
C) understand the parts of the firm's operation that create value and those that do not.
D) identify the firm's core competencies in each of the primary activities of the firm.

Question

Quizplus · Accepted Answer

Value chain analysis is used to understand the parts of the firm's operation that create value and those that do not. It involves examining a firm's activities and breaking them down into their component parts to identify sources of competitive advantage and areas for improvement. While it does consider external factors that impact the value chain, its focus is on identifying the firm's internal operations that contribute to value creation. Option A is incorrect because value chain analysis is focused on the firm's internal operations, not its external environment. Option B is incorrect because it looks at primary and support activities in isolation from the external environment. Option D is also incorrect because value chain analysis identifies the firm's core competencies across its entire value chain, not just in its primary activities.

Value Chain Analysis Is a Tool Used to