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Business Strategy and Accounting Basics

In Porter's value chain, which is classified as a primary activity?

  1. ATechnology development
  2. BOperations (manufacturing)
  3. CHuman resource management
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Answer: B. Operations (manufacturing)

The value chain divides a company's activities into primary activities, which follow the flow until products or services reach customers, and support activities, which support them, and analyzes in which activities value is created and where costs arise. The five primary activities are inbound logistics, operations, outbound logistics, marketing and sales, and service; the four support activities are firm infrastructure, human resource management, technology development and procurement. Technology development is not just the work of the R&D department but refers to technology efforts that support all activities, so it is included among the support activities.

  • A. This activity improves product and process technology and is a support activity that underpins all the primary activities.
  • B. Correct. It turns raw materials into products and is one of the primary activities.
  • C. This activity covers hiring, training and evaluating people and is a support activity.
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