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F Co sells motor vehicles in country V. It has recently discovered that the government is planning a major overhaul of the public transportsystem in country V, which will significantly increase its speed and comfort, while lowering the cost to make it attractive to individual drivers. Under which heading of Porter’s five forces model would this issue be included?

• Barriers to entry

• Power of suppliers

• Threat of substitutes

• Power of buyers

X Co offers accountancy training courses. The market is growing quickly and X’s courses are significantly different to those offered by its rivals. Any new company wishing to teach accountancy courses must obtain accreditation by the various accountancy organisations – a process which can take several years.

Based on the above information, which of the following statements can be made about X’s competitive environment?

• Competitive rivalry is likely to be low

• Supplier power is likely to be low

• Barriers to entry are likely to be low

• The threat of new entrants is likely to be low

High industry fixed costs would NOT be expected to be an issue within which one of Porter’s five forces?

• Competitive rivalry   

• Threat of substitutes  

• Barriers to entry  

• Power of customers

When considering Porter’s value chain analysis, outbound logistics is:

• receiving, handling and distributing inputs to the production system

• using rational approach to solving problems

• informing customers about the products a company has to offer

• distributing the products to the customer

AAH Co buys cable from a number of manufacturers, cuts it into shorter lengths and sells it to various retailers. One of its departments is solely responsible for the cutting of the cable.  

Which of Porter’s value chain activities is the department responsible for?

• Procurement

• Operations

• Inbound logistics

• Infrastructure

A company who sellsits product at a price below that ofsimilar rival products is likely to have adopted a differentiation strategy. Is this statement TRUE or FALSE?

• True

• False

H provides a range of products and services that are tailored specifically to pregnant women. What type of strategy is H adopting?

• Focus  

• Differentiation

Porter’s value chain determines whether and how a firm’s activities contribute to which of the following?

• its long term survival

• its competitive advantage

• its profitability

• its productive capacity

BCD Co is a large trading company. Steve is the administration manager and is also responsible for legal and compliance functions. Sheila isresponsible for customerservice 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?

• Steve

• Sheila

• Sunny

• Sam

AZ Co is performing a SWOT analysis and notes that it has a large cash balance. Which of the SWOT headings would this be most likely to fall under?

• Strengths  

• Weaknesses

• Opportunities

• Threats