Which of the following is a way to reconfigure a value chain?

• A. Outsourcing non-core activities to specialized firms
• B. Increasing the selling price of finished goods
• C. Delaying supplier payments to improve cash flow
• D. Reducing the number of employees in the marketing department

Answer: (A)

Verified step by step guidance

1. Understand the concept of a value chain: A value chain refers to the full range of activities required to create a product or service, from conception to delivery and beyond. It includes inbound logistics, operations, outbound logistics, marketing, sales, and service.
2. Identify the goal of reconfiguring a value chain: The purpose is to optimize efficiency, reduce costs, and enhance the competitive advantage of the business.
3. Evaluate the options provided: Analyze each option to determine whether it aligns with the goal of reconfiguring the value chain. For example, outsourcing non-core activities to specialized firms can streamline operations and focus resources on core competencies.
4. Consider the impact of each option on the value chain: Increasing the selling price of finished goods affects pricing strategy, not the structure of the value chain. Delaying supplier payments impacts cash flow management, not the efficiency of the value chain. Reducing employees in the marketing department may cut costs but could weaken marketing efforts.
5. Conclude that outsourcing non-core activities to specialized firms is a valid way to reconfigure a value chain, as it allows the business to focus on its core activities while leveraging external expertise for non-core functions.