Western Governors University (WGU) BUS2301 C483 Principles of Management Practice Exam

Establishing an effective value chain positively impacts profit margins because it enhances the efficiency and effectiveness of activities involved in producing and delivering goods or services. A well-designed value chain focuses on optimizing processes from raw material acquisition to production, marketing, sales, and post-sale service. By maximizing value for each step, unnecessary costs can be reduced while improving quality and customer satisfaction. This leads to increased revenue and, subsequently, profit margins, making the organization more competitive and profitable.

While a mission statement can guide a company's strategy, the establishment of a value chain is more directly related to operational activities and financial outcomes. The option regarding standardizing customized products contradicts the idea of a value chain, which emphasizes tailored value and differentiation. Lastly, eliminating market share would not be a desirable outcome in a competitive environment; instead, an effective value chain aims to increase or maintain market share through enhanced value offerings.