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Linkages require co-ordination
. For example, Just In Time requires smooth functioning of 
operations, outbound logistics and service activities such as installation. 
12.4 Value network 
Activities and linkages that add value do not stop at the organisation's 
boundaries
. For example, when a 
restaurant serves a meal, the quality of the ingredients – although they are chosen by the cook – is 
determined by the grower. The grower has added value, and the grower's success in growing produce of 
good quality is as important to the customer's ultimate satisfaction as the skills of the chef. 
According to Johnson et al, (2005), an organisation's value chain is connected to the value chains of 
suppliers, distributors and customers in what may be referred to as a 
value network
.
A value network generates value through exchanges between two or more organisations. Exchanges may 
include both tangible (for example goods) and intangible (for example knowledge such as collaborative 
design). 
QUESTION 
Primary activity
 
BCD Co is a large trading company. Steve is the administration manager and is also responsible for legal 
and compliance functions. Sheila is responsible for after-sales service and has responsibility for ensuring 
that customers who have purchased goods from BCD Co are fully satisfied. Sunny deals with suppliers 
and negotiates on the price and quality of inventory. He is also responsible for identifying the most 
appropriate suppliers of plant and machinery for the factory. Sam is the information technology manager 
and is responsible for all information systems within the company. 
According to Porter's value chain, which of the managers is involved in a primary activity as opposed to 
a support activity? 
A Steve 
C Sunny 
B Sheila 
D Sam 
ANSWER 
B 
The word 'administration' indicates that Steve is in a support role and that 'information 
technology' indicates that Sam is in a support role. Sunny's responsibilities describe procurement 
which is also a support role. 
 
BPP Tutor Toolkit Copy

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CHAPTER 2
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THE BUSINESS ENVIRONMENT