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 firmís competitive advantage (e.g., cost
reduction, product differentiation) so that the firmís position in
the industryís value chain can be clarified.
2. Identify the ways in which the firmís 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 firmís remaining
activities can be linked.