Activity$-$based costing:

involves determining which value chain activities represent primary activities and which represent support activities. applies benchmarking techniques to develop cost estimates for the value chain activities of each major rival. involves the creation of an accounting system that assigns a company's expenses to whichever activity in a company's value chain responsible for creating the cost.

is a powerful tool for gathering competitive intelligence on a rival company's value chain, enabling analysts to classify a rival's prim support activities.