Question

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?

Answer 1

Answer: A. Install modern manufacturing equipments to improve efficiency.

Explanation: Organizations may often need to ring changes in other to improve and add value to product being offered to consumers. Shaping and constantly trying to improve the internal processes of a firm's production processes can be explained as the strategic activity system whereby firms pay attention to details and try to implement changes in the internal processes of production.

In the context above, Installing modern manufacturing equipment, is a major way of improving the internal processes of a firm in the production of output. This will add finesse and improve efficiency in output.

Answer 2

Install modern manufacturing equipment to improve efficiency

Step-by-step explanation:

Strategic activity systems describes the processes or activities that a firm engages in in converting input to output. It could be primary or secondary. Primary affects products directly while secondary inputs affects output/products indirectly.

In the above case, the firm may have to install modern manufacturing equipments which would increase efficiency and improve profit margin while in accordance with strategic activity systems framework.