Answer (C) is correct . The second step in a value-chain analysis is to determine how each value-creating activity can produce a competitive advantage for the firm. This step has multiple substeps: 1. Identify the firm’s competitive advantage (e.g., cost reduction, product differentiation) so that the firm’s position in the industry’s value chain can be clarified. 2. Identify the ways in which the firm’s value-creating activities can generate additional customer value. 3. Identify activities that are candidates for cost reduction or, in the case of non-core competencies, outsourcing. 4. Identify value-adding ways in which the firm’s remaining activities can be linked.
Answer (A) is incorrect because Identifying activities that are candidates for cost reduction or, in the case of non-core competencies, outsourcing, is one of the phases of a value- chain analysis.
Answer (B) is incorrect because Identifying ways in which the firm’s value-creating activities can generate additional customer value is one of the phases of a value-chain analysis.
Answer (D) is incorrect because Identifying the firm’s competitive advantage (e.g., cost reduction, product differentiation) so that the firm’s position in the industry’s value chain can be clarified is one of the phases of a value-chain analysis.
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