Which of the following are the two main categories of value creation activities that firms undertake?

• A. Investing activities and marketing activities
• B. Operating activities and financing activities
• C. Primary activities and support activities
• D. Production activities and administrative activities

Answer: (C)

Verified step by step guidance

1. Understand the concept of value creation activities: Value creation activities are the processes and actions undertaken by a firm to generate value for its stakeholders, including customers, shareholders, and employees.
2. Recognize the two main categories of value creation activities: These are typically divided into primary activities and support activities, as outlined in frameworks like Michael Porter's Value Chain model.
3. Define primary activities: These are directly involved in the creation and delivery of a product or service, such as inbound logistics, operations, outbound logistics, marketing and sales, and service.
4. Define support activities: These provide the necessary infrastructure and resources for primary activities to function effectively, including procurement, technology development, human resource management, and firm infrastructure.
5. Relate the correct answer to the question: The correct answer is 'Primary activities and support activities,' as these are the two main categories of value creation activities that firms undertake to deliver value to their stakeholders.