Detailed Answer
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.
