F Co sells motor vehicles in country V. It has recently discovered that the government is planning a major overhaul of the public transport system 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?

BT9.3

Quiz
•
Professional Development
•
University
•
Medium
Timur Ananyev
Used 12+ times
FREE Resource
10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Barriers to entry
Power of suppliers
Threat of substitutes
Power of buyers
Answer explanation
The planned overhaul of the public transport system in country V represents a potential alternative to using motor vehicles, making it a substitute. This falls under the 'Threat of substitutes' in Porter's five forces model.
2.
MULTIPLE CHOICE QUESTION
45 sec • 1 pt
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
Answer explanation
The accreditation process for new companies takes several years, creating a significant barrier to entry. This suggests that the threat of new entrants is likely to be low, as it deters potential competitors from entering the market.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
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
Answer explanation
High industry fixed costs primarily affect barriers to entry and competitive rivalry, as they deter new entrants and intensify competition. However, they do not directly impact the threat of substitutes, which is influenced by alternative products.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
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
Answer explanation
In Porter’s value chain analysis, outbound logistics specifically refers to the activities involved in distributing the products to the customer, making this the correct choice.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
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
Answer explanation
The department responsible for cutting the cable is engaged in transforming inputs (cable) into outputs (shorter lengths), which aligns with Porter's value chain activity of Operations.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
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
7.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
BCD Co is a large trading company. Steve is the administration manager and is also responsible for legal and compliance functions. Sheila is responsible for customer service 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
Answer explanation
The term ‘administration’ indicates that Steve’s role is a support activity, as this term is used in the model. The description of his role could only reinforce this conclusion. Likewise, ‘information technology’ indicates that Sam performs a support role. Finally, although Porter’s term ‘procurement’ is not included in the statement, Sunny’s responsibilities for dealing with suppliers of inventory and capital equipment are sufficient to conclude that Sunny also occupies a support role.
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