Final answer:
Option (B), Support functions in the value chain add value by reinforcing primary activities, integrating the collection of raw materials with their transformation into finished products. The synergy of primary and support functions enhances efficiency and effectiveness in the value chain.
Step-by-step explanation:
The relationship between primary activities and support functions in the value chain is essential for producing value-added products and services. Instead of viewing them as separate elements, they are crucially interlinked within a business. To specifically answer the question, option b is correct: Support functions can add value by reinforcing primary activities. Support functions such as firm infrastructure, human resource management, technology, and procurement empower the effective execution of primary activities like inbound logistics, operations, outbound logistics, marketing and sales, and service. This synergy enhances the overall efficiency and effectiveness, leading to increased value creation.
Primary activities are concerned with the creation and delivery of products and services, which entails the collection of raw materials and their transformation through manufacturing. Meanwhile, support activities provide the necessary assistance to optimize these processes. The value chain is the full range of activities that businesses conduct to bring a product or service from conception to delivery to the end consumer. Improved communication technology, sharing information, and transportation allow for a more finely split value chain, leading to specialization and economic gains through intra-industry trade.