Igor's Furniture has seen its profit margins shrink over the past several years as increased competition has driven down furniture prices. You have been tasked with improving the company's margins. Which of the following approaches makes the most sense within the context of strategic activity systems?
A) Go against the trend and raise prices.
B) Install modern manufacturing equipment to improve efficiency.
C) Increase spending on online marketing efforts.
D) Focus on imitating the most successful products of competitors.

Question

Quizplus · Accepted Answer

Strategic activity systems are networks of connected activities that each contribute incremental value to the value chain. To reduce costs and improve the chances of establishing or sustaining a competitive advantage, strategic activity systems must be continuously analyzed and improved to address changes in the external environment. Improving a primary activity, such as manufacturing, is the best option to reduce costs and improve margins.

Igor's Furniture Has Seen Its Profit Margins Shrink Over the Past